Why Waiting Could Cost You: How Rate Cuts Are Fuelling the Next Property Boom - June Market Update 2025

It’s often said the early bird gets the worm — and in property, it’s never been more true than right now. As Australia embarks on a fresh interest rate cutting cycle, the property market is already springing back to life.

If you’ve been waiting on the sidelines, now might be the time to reconsider.

The Reserve Bank’s recent decision to cut interest rates, and signals of more to come, have had a swift and tangible effect on buyer sentiment. As borrowing becomes cheaper, confidence is returning — faster and stronger than many anticipated. More buyers are re-entering the fray, particularly at auctions, where competition has ramped up noticeably.

Take, for instance, the recent auction at 105 Macaulay Road in Stanmore. Bidding leapt by $1 million in just 17 seconds, including a single $800,000 bid, as enthusiastic buyers drove the final price to a staggering $5.5 million — well beyond expectations. Auction volumes are surging, clearance rates are holding firm above 70%, and the number of registered bidders has more than doubled, reflecting this renewed energy.

Auctioneer Damien Cooley recently commented, "It felt like the strongest day I’ve had in the last couple of years." His results — selling 12 out of 13 properties in one day — aren’t an anomaly, but a reflection of what’s happening more broadly.

Rate cuts have a powerful psychological and financial effect on buyers. As home loan repayments decrease, the pool of people who can afford to buy expands. It’s no coincidence that previous rate-cutting cycles have typically been followed by strong surges in property prices.

History tells the story clearly. After the GFC, during the 2012–2013 rate cut cycle, property prices took off, delivering double-digit growth across most capital cities within 18 months. More recently, the cuts during the pandemic period helped spark one of the most dramatic property booms in Australian history.

Below is a chart from the Bank of Queensland that demonstrates the relationship between rate cuts and property price growth:

Change in house prices in the two years after the start of a rate cut cycle (%)

Source: Bank of Queensland 2025

Each rate cut cycle has fuelled price growth as borrowing costs reduce and demand outstrips supply — and we are seeing the early signs of history repeating.

Currently, we are seeing a strong uptick in auction volumes and clearances — a classic early indicator of a market on the move. Buyer confidence, which had been dampened by higher rates and inflation concerns, is lifting sharply. Clearance rates in Sydney and Melbourne are holding at high levels, around 70% and 72% respectively, even with increased auction listings.

More tellingly, average bidder numbers have surged. In some cases, agents are reporting eight or more registered bidders per property — up significantly from previous months where two or three bidders were the norm.

In the prestige market, confidence has also returned. Vaucluse recently saw a $20 million-plus sale smashing its reserve by $2 million at a private auction. Agents in the eastern suburbs and high-end markets are reporting a sharp rise in enquiry levels and faster transaction times.

Many potential buyers tell themselves they’ll “wait for a better time.” But here’s the catch: during past rate-cutting cycles, the majority of the price increases have occurred within the first 12–18 months. By the time it becomes obvious that the market is in an upswing, prices have already moved considerably higher.

Waiting too long often results in buyers chasing a rising market, stretching budgets, compromising on quality, or missing out altogether.

For example, CoreLogic data shows that in the 12 months following the last three significant rate-cutting cycles, property prices in Sydney rose between 10% and 20%.

If you buy sooner, you not only avoid higher prices, but you also start building your equity earlier. Compounding works in your favour. A $1 million property rising at just 10% per annum grows by $100,000 in a year — equity that you can leverage into your next investment or use to strengthen your financial position.

Delaying, on the other hand, means missing out on that growth and paying a higher entry price — potentially reducing your borrowing power and financial flexibility.

Looking ahead, the outlook for Australian property remains robust. Most economists and property analysts are forecasting moderate to strong price growth over the next 12 to 24 months. SQM Research expects national property prices to rise between 7% and 12% over the next year, with Sydney and Melbourne likely to lead the way due to undersupply and returning migration.

If the RBA delivers further rate cuts, as markets are pricing in, affordability will continue to improve, and competition for quality property will only intensify.

In every market cycle, there’s a window of opportunity — and the early signs suggest that window is opening now. As history has shown, those who move decisively tend to secure the best outcomes, while those who hesitate risk being priced out or forced to make rushed decisions later.

If you’ve been considering buying your next home or an investment property, now is the time to act strategically. With borrowing costs falling and buyer confidence rebounding, the conditions are primed for growth. Securing the right property now means you can ride the next wave of price increases and build your wealth sooner — not later.

At Propertybuyer, we help you navigate this competitive market with expert advice, local knowledge, and proven negotiation strategies. Don’t chase the market — get ahead of it.

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