No rate cut but property demand remains strong

A decision by the Reserve Bank of Australia (RBA) to keep interest rates unchanged despite easing inflation is unlikely to impact the property market, according to LJ Hooker.

Head of Research Mathew Tiller believes uncertainty around US tariffs and the impact on global inflation, along with a strong employment market, led to a cautious response by the RBA.

“Australia’s economic growth has slowed, with consumer spending, business investment and building approvals all weakening, so there is an expectation that a rate cut is around the corner,” Mr Tiller said.

“Until that happens, we will likely see the market continue as it has been for the past few weeks. Listing volumes have remained tight, as many sellers continue to hold back, creating a supply and demand imbalance that is putting upward pressure on prices.”

Falling interest rates have already lifted confidence in the housing market, with auction clearance rates strengthening and national dwelling values rising 3.4% over FY25, according to Cotality.

LJ Hooker network has recorded elevated appraisal volumes over the second half of FY25, a sign that vendors are considering a move but have been waiting for the right moment. Around 9% of annual sales are achieved during November, with spring deemed a peak selling season.

Even in a quieter winter market, with listings down from this time last year, demand for property has remained consistent, with auction clearance rates at around 70%.

Buyer activity has picked up strongly since the first rate cut in February, with LJ Hooker offices reporting increased enquiry and higher open home attendance. The outlook is positive, with low supply, steady demand, and improved borrowing power expected to drive further price growth across most markets.

“With interest rates forecast to fall below 3% in early 2026 and housing supply still critically low, we expect continued momentum in both buyer and seller activity over the next 12 months,” Mr Tiller said.

“We are also seeing several new housing-related government initiatives aimed at making housing more affordable and accessible come into effect from this month. This includes the national solar battery rebate, Queensland’s Boost to Buy scheme and apprenticeship subsidies to support construction capacity, so it will be interesting to see the positive impact these have on the market.”