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The Reserve Bank of Australia (RBA) has cut the cash rate and interest rates have come down. So, is now a good time to buy property?

The answer depends on your unique circumstances and goals. But generally speaking, it’s always best to get a leg up on the property ladder sooner rather than later.

Here are some compelling reasons to consider jumping right in, rather than staying on the diving board.

Competitive interest rates

In February, the central bank lowered the cash rate from a 13-year high of 4.35 per cent to 4.10 per cent. Many lenders, including Australia’s big four banks, announced they would pass on the rate cut in full.

The average home loan interest rate is now sitting at around 6.24 per cent p.a. for owner occupiers. Interest rates are far from the levels we were seeing a few years ago when they were in the 2 per cent range, but they have been coming down in recent weeks, which is good news for prospective borrowers. Many lenders are also offering sweeteners to entice borrowers through their doors. Examples include free extra repayments and redraws, no application or ongoing fees, and annual rate discounts.

Your borrowing power may have increased

With interest rates coming down, your borrowing capacity, or the amount a lender is likely to lend you, may have increased. In other words, you may be able to afford a property that was previously just out of reach.

For new borrowers on an average income with an average-sized loan, the change in the cash rate is estimated to have increased borrowing power by $9,000 to $10,000. That, combined with the tax cuts that came into effect from 1 July last year and the easing of inflationary pressures, may put borrowers in a better financial position to borrow right now.

If you’re interested to know what your current borrowing power is, get in touch and we’ll crunch the numbers for you.

Property prices have rebounded

Up until the February cash rate cut, there were clear signs that Australia’s property market was cooling.

Over the past few years, property prices across the nation surged. Between March 2020 and January 2024, housing values increased 33.9% – or $239,000 – while units shot up 11.2 per cent (around $65,235).

But last year, property price growth slowed. Five of the eight capital cities recorded a decline in values between July and December. In October, property prices peaked, then dropped 0.1 per cent in December.

In February, however, national home values increased 0.3 per cent, breaking a short and shallow downturn that lasted just three months. Every capital city except Darwin recorded a monthly rise in values in February. If property prices continue to rise, it may be wise to fast-track your purchasing plans and take advantage of current prices while they last.

Ready to get started?

Deciding when to buy a home or investment property comes down to your personal financial circumstances and goals. However, there are many good reasons to consider purchasing right now. Before you start house hunting, chat to us about getting your finance pre-approved. That way, you’ll be ready to negotiate with confidence when you find the right property for your needs.

Managing your home loan well can give you more flexibility and help you pay off your mortgage sooner. A redraw facility could be one way to reduce interest costs while still having access to extra funds when you need them. Here’s what you need to know.

What is a redraw facility?

A redraw facility lets you access any extra repayments you’ve made on your home loan. Instead of those funds simply reducing your loan balance, you can withdraw them later if needed.

How does a redraw facility work?

Say your minimum mortgage repayment is $3,600 a month, but you regularly pay $3,800. After a year, you’d have $2,400 in extra repayments. If an unexpected expense comes up – like urgent home repairs – you can redraw some or all of that extra money from your loan.

Benefits of a redraw facility

• Every extra repayment reduces your loan balance, which means paying less interest over the life of the loan.
• Redraw facilities let you manage your cash flow, providing convenient access to extra funds when needed without relying on high-interest loans or credit cards.
• Redrawing funds is usually straightforward through online banking or by contacting your lender.

Things to keep in mind

While redraw facilities offer flexibility, here are a few things to consider:

• Some lenders may charge a fee each time you redraw, or place limits on minimum or maximum amounts.
• Not all mortgages come with a redraw facility, and conditions can vary significantly between lenders.
• Withdrawing funds increases your loan balance, which could result in paying more interest over time compared to leaving the funds untouched.

Redraw vs offset accounts

While offset accounts and redraw facilities both help reduce interest costs, they serve different purposes. Offset accounts can be beneficial for keeping savings readily available, whereas redraw facilities provide straightforward access to extra repayments. A redraw facility might suit you best if you prefer simplicity and don’t need regular access to extra funds.

Ready to make your mortgage work smarter?

Having the right loan features for you can make a big difference in managing your mortgage and keeping costs down. If you’d like to understand how a redraw facility could work for you, let’s chat.

Get in touch today to explore your options.

In recent months, we’ve seen a definite shift in the property market. It’s left one question on many aspiring property owners’ lips: Has the property market peaked?

If you’re looking to make the most of falling interest rates and buy a home or an investment property in 2025, it’s important to be up to speed with what’s happening before you dive in.

Let’s run through what we know so far.

Property price growth is losing steam

Australia’s home values were up 4.9 percent in 2024, adding approximately $38,000 to the median value of a home.

The first half of 2024 saw national home values rise 4.1 per cent, before slowing to just 0.7 per cent through the second half of the year. Five of the eight capitals recorded a decline in values between July and December.

Following a strong period of growth between February 2023 and October 2024, prices peaked in October and remained flat in November, then dropped -0.1 percent nationally in December. That represented the first decline in almost two years. Prices remained broadly steady across January.

CoreLogic research director Tim Lawless said the decline in values was not surprising.

“This result represents the housing market catching up with the reality of market dynamics,” he said.

“Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher.”

Rental growth has slowed

In 2024, the rate of national rental growth decelerated.

Throughout the year rents rose 4.8 percent. In contrast, rents increased 8.1 per cent in 2023.

In the December quarter, we saw national rent values increase just 0.4 per cent. That represented the smallest fourth quarter change in rents since 2018.

According to CoreLogic, the numbers paint a clear picture – the national rental market has passed the peak of the rental boom.

“Rental affordability continues to be a significant drag on rental growth,” CoreLogic economist Kaytlin Ezzy said.

What this means for sellers and buyers?

CoreLogic Head of Research Eliza Owen said a cyclical downswing was likely for early 2025, but it may not necessarily be large. She said home value declines tended to be shorter and smaller than periods of property price growth.

Given the market conditions, some sellers may avoid selling until property prices come up, thereby restricting the supply of properties on the market. Growth in real incomes may also support buyer demand as inflation continues to come down.

The RBA has cut the cash rate, and this could push up property prices, as buyers’ borrowing capacities increase.

Bottom line: the property market may have peaked, but the downturn in housing values is likely to be moderate and short lived, according to the experts.

Looking to buy?

If you’re hoping to buy a home or investment property, get in touch and we’ll run through your finance options. Interest rates have been on the move lately, which is a compelling reason to have a professional like us on your side. We understand the intricacies of a changing lending market and will find the right home loan for your specific needs.

Please contact us for assistance.