Professionals Real Estate 
The Reserve Bank of Australia’s (RBA) recent interest rate cut has property sellers across the nation wondering how the change will affect the current and future value of their home.
There are already signs the news is positive. Find out how interest rate changes may influence your decision to sell this year.
How the recent interest rate change affected property prices
Reductions in interest rates generally lead to increased borrowing capacity for buyers, and the flow on of this is higher property prices.
After the RBA dropped interest rates by a quarter of a point in February, the latest housing price data supports this trend:
- National uptick: In February, national average house prices rose by 0.3%, ending a three-month period of declines and stagnant growth.
- City-specific gains: Melbourne and Hobart each experienced a 0.4% increase in property values during the same month, while Sydney and Brisbane also saw positive growth. The only city to experience a drop in prices was Darwin, with a 0.1% loss.
- Regional prices: Combined values rose 0.4% over the month of February and 1.0% over the rolling quarter
These latest figures point to the impact of an interest rate change being immediate, even though it was only a small decrease.
Expert forecasts
After the February rate cut and subsequent increase in national property prices, observations from industry experts included the following:
- Tim Lawless, Research Director at CoreLogic, suggested that the rate cut has improved market sentiment, which played a role in the February price increases.
- Eleanor Creagh, Economist at REA Group, noted that while buyer confidence has improved post-rate cut, ongoing affordability challenges may temper rapid price growth.
- Michael Yardney from Property Update reminded home sellers that there are markets within markets and local knowledge is essential during periods when prices are shifting.
What does the rate change mean for property sellers?
The forecast for future rate cuts is mixed. According to Canstar, the major banks predict between one and three more changes this year, which will leave the cash rate between 3.35% and 3.85%.
For sellers, this presents opportunities and considerations:
- Increased buyer activity: Lower interest rates and even the promise of lower interest rates peak buyer interest as borrowing becomes more affordable. This surge can result in more competitive bidding and potentially higher sale prices.
- Strategic timing: Listing properties during periods of rising buyer demand gives sellers the advantage. If you put your home on the market while positivity about prices is high, you’ll be able to achieve a quicker, more favourable sale.
Should you sell in 2025?
A drop in interest rates is good news for home sellers because it gives buyers a reason to be optimistic. This, combined with a still-low amount of stock on the market means that a well-presented home in a good location should sell fairly quickly and for a great price.
One final note: If you decide to sell, you’ll need to buy your next place as quickly as possible. If you’re in a rising market, a fast move will save you money.
Going beyond interest rate trends and national averages, the outcome of your sale will depend on a number of factors beyond interest rates, including your marketing, your method of sale and the agent you choose to represent you.
If you want a reliable and experienced operator to share the current value of your home and help you sell it for the right price, reach out to your local Professionals office today.
