Rate reduction to bring fresh growth to the spring property market

The Reserve Bank of Australia (RBA)’s decision to cut interest rates is set to lift buyer and seller confidence ahead of the upcoming spring selling season.

LJ Hooker Group Head of Research Mathew Tiller said the much-anticipated rate reduction will be welcomed particularly by first-time purchasers and upgraders.

With inflation now at its lowest since 2021, the RBA’s announcement also offers some relief to mortgage holders as family budgets remain under strain, and the jobs market shows signs of slowing.

“Property prices are still rising, up 6.4 per cent so far this year due to tight supply and strong demand, and this is putting additional pressure on those looking to enter the market or considering a move,” Mr Tiller said.

“Affordability is challenging, so any rate cut will help to build confidence, especially at a time when we expect to see stock levels start to increase and a high level of activity. Our appraisal numbers have been steadily climbing over the winter, indicating people are considering their options.”

Auction clearance rates have remained around the 70 per cent mark during the past few weeks as the market heads towards spring.

With inflation under control, job markets softening and global growth slowing, it is forecast that interest rates will fall below three per cent in early 2026.

Mr Tiller expects another rate cut in November, followed by another two reductions in the New Year, which will keep up the momentum during the next 12 months. Brisbane, Adelaide and Perth are markets to watch, with low stock and strong demand keeping prices moving.

Overall, listings are about 11 per cent lower than at the same time last year, while in the 2025 financial year, they were 6.3 per cent below the 10-year average, creating a sellers’ market.

“The rate cut will bring more certainty to buyers and reassure those looking to list, prompting some to act sooner as improved borrowing capacity is likely to increase demand,” Mr Tiller said.

“Going to market in spring is more than just about gardens in bloom or better presentation; buyers start to get more serious and motivated from September, and that is a big incentive for sellers. We can see from the clearance rates that people are out there buying property over winter.”

Auctions are considered an effective selling strategy in spring as vendors can accept an early offer or hold out to put their property under the hammer. Buyers also typically want to complete their purchase before the end of the year.

“Campaigns typically run for three to four weeks, often faster than a private treaty sale, and you can see what the market is willing to pay,” Mr Tiller said.

“Having a deadline heading towards the end of the year is very appealing. It is not just Sydney and Melbourne, we expect to see auction activity picking up in other capital cities too.”