An RBA decision to keep interest rates unchanged can influence the real estate market in several ways. It may slow the growth of house prices by maintaining higher borrowing costs, while also offering predictability for buyers, sellers, and homeowners. Buyers may anticipate future rate reductions, whereas those with variable-rate mortgages continue to face elevated repayments. Sellers might remain cautious; however, the pause in rate changes could contribute to a gradual recovery in market confidence if further rate cuts are expected.
But what will it mean for our local market? – The Spring buying season remains strong for sales and a growing number of properties are being being listed. Will a rate hold effect the local market?
We asked some respected real estate agents for their take on the RBA decision and what, if any, impact it could have on the Highlands’ market.
According to First National Bowral Partner, Reece Woods, the RBA’s decision won’t affect the current trends in the Highlands market.
“Momentum is starting to pick up in the Highlands, which should continue in the short term”,
“Properties that are priced well will continue to sell no matter what. Homes at the higher end of the market take longer to sell” he said. “Where we are seeing a slight upshift in interest is in the first home buyers’ segment, especially with the Government’s First Home Buyers 5% deposit scheme guarantee which kicked-in on 1 October.”
Di Jones Real Estate Bowral’s Craig Symons said that the RBA’s decision to keep rates on hold will see a `status quo’ in the local market where both sales and listing remain positive.
“We all hoped interest rates would drop, which would have further stimulated the market,”
“Listings in the Highlands has seen an increase in stock levels similar to last spring,” he said.
“However we are seeing increased movement in areas such as Moss Vale’s Daraby Estate, Renwick and East Bowral where prices are well within expectation range,”
Like Reece, Craig believes these areas will start to move more quickly with the introduction of the government’s 5% deposit scheme. “In reality, a $50,000 deposit will enable the purchase of a home in the $1 million range,” he added.
“This, combined with fewer interest restrictions could see vendors that have been sitting on the sidelines move into the market as well,” said Craig.
Early in 2025 the ‘experts’ were predicting up to three rate cuts this year. Whilst that hasn’t eventuated, many pundits are hoping for at least another cut before the end of the year.
Let’s keep our fingers crossed and hope that the RBA has some better news after it next meets.