With the Reserve Bank of Australia (RBA) set to make its next move in just two weeks, market anticipation is at an all-time high. A rate cut seems all but certain—central banks rarely surprise without reason—but the real question isn’t if they’ll cut, but rather by how much and how soon the next one will follow.
Industry analysts are already shifting their forecasts, with SQM Research now upgrading its base case to its most bullish scenario, expecting early and significant rate cuts to drive strong property market growth. This has the potential to fuel competition, accelerate price increases, and create momentum across key markets
But while a hot market brings opportunity, it also raises new risks—overpaying, misjudging investment fundamentals, and missing out on the best opportunities. Now, more than ever, expert, data-driven guidance is essential to navigate the coming shifts with confidence
The market is expecting a rate cut in February with another in April and perhaps a 3rd in June - but by how much?Bank consensus now no cuts till May.
Still low volume, but look at Melbourne, higher clearance at lower prices. Affordability remains key factor, buying demand seems to be lifting.
On expectations of early rate cuts, last week SQM changed their base case forecast for the Australian property market. Their expectation is for buoyant market conditions of early and deep rate cuts boosting affordability, combined with strong population growth boosting demand. The result as can be seen in the folowing table, is price growth everywhere
With expectations of early rate cuts growing, SQM Research has revised its base case forecast, now anticipating strong property price growth nationwide. The combination of deep rate cuts boosting affordability and strong population growth fueling demand is expected to drive buoyant market conditions throughout 2025
For property owners and mortgage holders, this is clearly welcome news. However, amidst the excitement, two critical questions remain largely unanswered:
With expectations of early rate cuts growing, SQM Research has revised its base case forecast, now anticipating strong property price growth nationwide. The combination of deep rate cuts boosting affordability and strong population growth fueling demand is expected to drive buoyant market conditions throughout 2025.
For property owners and mortgage holders, this is clearly welcome news. However, amidst the excitement, two critical questions remain largely unanswered:
A February rate cut now has a 93% probability, and the RBA’s lack of public commentary on this expectation suggests it is unlikely to deviate from the market’s pricing. Central Banks rarely disrupt expectations without a compeling reason.
But the magnitude and frequency of rate cuts remain uncertain. Wi l the RBA move aggressively with 25bp, or opt for a more cautious 10bp cut? Wi l they quickly folow up with further reductions, as NAB forecasts a 125bp lower cash rate by February 2026? Or wi l they take a shalower approach, mirroring the Federal Reserve’s strategy in the US?
There is no doubt that the combination of rate cuts, rising rents, land shortages, elevated building costs, and continued immigration wi l drive home price growth in 2025. But this is not a one-size-fits-al market
In an increasingly competitive environment, investors and homebuyers face a critical decision—do they seek a buyer’s agent promising off-market "bargains" in a hot market or a seasoned professional with a proven track record of strategic advice, value-driven negotiations, and meticulous due diligence? This year offers tremendous opportunities, but only for those who navigate the market with insight and strategy. The question is, wi l you be ahead of the curve—or just folowing the hype?
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