Confidence, competition, and price shifts in the year ahead

How a February Rate Cut Could Impact Property in 2025

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A potential February rate cut could boost buyer confidence and drive competition. With prices set to rise in key markets, timing will be crucial for buyers.

With inflation now within the RBA’s target range, a February rate cut is looking increasingly likely, according to Commonwealth Bank and ANZ. But what would this mean for the property market in 2025?

Experts predict that an early rate cut could restore confidence, particularly in Sydney and Melbourne, where activity has slowed. Ray White forecasts price growth of up to 3%, with further gains depending on the number of cuts throughout the year.

Buyer demand is also expected to surge, with McGrath Estate Agents predicting a meaningful market shift after multiple cuts. However, some sellers may initially take a wait-and-see approach before listing.

As competition heats up, the first quarter of 2025 may be the best window for buyers before prices rise. Propertyology forecasts growth in 20 of Australia’s 25 largest cities, with some markets potentially booming by 8% or more.

While government schemes like Help to Buy aim to support first-home buyers, experts warn that undersupply remains a key driver of price increases, meaning demand is likely to keep outpacing housing availability.

What Does This Mean for You?
If rates drop sooner than expected, competition is likely to rise quickly. Buyers may have a short window to act before demand accelerates and prices follow.

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