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The Australian property market is experiencing renewed optimism following the Reserve Bank of Australia's second interest rate cut of 2025. With the cash rate now sitting at 3.85% after May's 25 basis point reduction, borrowers across the nation are seeing tangible relief in their mortgage repayments.
Major lenders have been quick to pass on the rate cuts, with over 90 financial institutions announcing reductions to their variable rate home loans. For borrowers with a typical $500,000 mortgage, the cumulative rate cuts could save approximately $150-200 per month in repayments.
Market ResponseThe immediate market response has been encouraging. Capital city auction clearance rates jumped to 65.1% in the week following May's rate cut - the highest level since July 2024. This suggests renewed buyer confidence is beginning to translate into market activity.
Looking AheadThe Big Four banks are forecasting further rate cuts throughout 2025, with most economists predicting the cash rate could fall to 3.35% by December. This continued easing cycle is expected to provide significant support for both first home buyers and the broader property market.
Australia's rental market continues to face intense pressure as the housing shortage drives competition and pushes many residents toward more affordable regional areas.
Perth continues to outperform the national property market, with strong economic fundamentals and improved affordability driving sustained price growth.
For first home buyers, 2025 is shaping up to be a year of opportunity.
Self-managed superannuation funds (SMSFs) are finding new opportunities in the property market as interest rates fall and rental yields improve across key markets.
Book a no-obligation consultation with one of our mortgage specialists today and take the first step toward finding your perfect financing solution.
