March cash rate held – why are buyers feeling more confident?
Following its latest meeting, the Reserve Bank of Australia (RBA) has announced it will hold the cash rate at 4.35%. This is the third time it has been held since it was last raised in November.
With inflation flattening at 3.4% in January and weaker-than-expected gross domestic product data this month, there have been whispers we could see some cuts to the cash rate sooner than expected. Current projects forecast potential cuts around August or September, but time will tell.
So, with the cash rate looking to hold steady for a while yet, why are we seeing an increase in people buying property?
Buyers feeling more confident
In the Loan Market network, we have seen a 13% increase in the number of buyers wanting to get pre-approved for finance this year compared to the start of 2023. We have also seen 16% more first-home buyers this year. This shows buyers are feeling more confident, which could be buoyed by the expectation that we have reached interest rate peaks for this cycle.
Another reason we could be seeing more first-home buyers entering the market is the strong growth we are continuing to see in house price growth throughout the nation. According to Ray White data, house prices have already increased 2.2% this year. If this continues, we could see prices increase by over 10% over the year.
Ray White Chief Economist Nerida Conisbee said this could signal stronger growth than last year.
“Over the past 12 months, house prices have increased by 9.7%, and units by 7.4%. However, growth has accelerated quickly in the first two months of this year,” she said.
“The big change this year is the interest rate outlook. Monthly inflation came in at 3.4% in the year to January. With the Reserve Bank of Australia aiming for interest rates at between 2-3%, the odds of a rate cut are rising. So much so that as of last week, markets were pricing in three cuts over the next 12 months.”
On top of this, low rental vacancy rates driving up rental prices could be prompting first-home buyers to move into ownership.
Increasing rents could be attracting investors
While the growing rental prices and lower vacancy can be difficult for tenants, it can be good news for investors. According to Loan Market data, the number of investment loans lodged are up by 6% this year compared to early last yea
PropTrack data shows median advertised rents nationally increased by $60 per week over 2023, averaging $580 per week. Reports show pressures on international investors, particularly those in China who are facing increased interest rates in their own country and a less-desirable economic climate, are leading to many selling their Australian properties. This opens an opportunity for other investors to expand their own portfolio.
Get in touch if you are considering purchasing property – either to live in or to expand your investment portfolio.
Licensing statement: Rayne Finance ABN [70 605 100 838] is authorised under LMG Broker Services Pty Ltd Australian Credit Licence 517192. Disclaimer: (1) As with any financial scenario there are risks involved. This information provides an overview or summary only and it should not be considered a comprehensive analysis. You should, before acting in reliance upon this information, seek independent professional lending or taxation advice as appropriate and specific to your objectives, financial circumstances or needs. This publication is provided on the terms and understanding that: (2) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication. (3) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to the maximum extent permitted by the law to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication.
Explore other FAQs and Facts
What the federal budget means for buying property
The 2025 federal budget introduces key measures affecting home buyers, including an expanded Help to Buy scheme, increased infrastructure investment, and incentives to grow the construction workforce. Foreign investors face new restrictions, and funding for prefabricated homes aims to accelerate supply. These changes could significantly reshape Australia’s property market.
Own your debt before it owns you
Here’s the hard truth: If you’re not in control of your debt, it’s controlling YOU.
Debt doesn’t just sit quietly in the background. It piles up, creeps into your financial freedom, and slowly starts calling the shots. It’s time to flip the script.
Find out how taking control of your debt can restore your financial freedom and bring peace of mind.
Rental growth slows as affordability is stretched
Rental growth slowed in 2024, despite the national median rent rising 4.8% for the year. Affordability pressures led renters to form larger households, easing demand. Meanwhile, increased investor activity added supply, lifting vacancy rates slightly to 1.9%. Still, with rents rising and vacancies low, many investors remain in a strong position.
Is the property downturn already over?
Australia’s property market rebounded swiftly in early 2025, reversing December’s brief price decline. Growing expectations of interest rate cuts have boosted confidence, while constrained housing supply continues to drive long-term price growth. With construction delays and undersupply persisting, the market’s dynamics are shifting toward sustained appreciation, rather than traditional boom-and-bust cycles.
Rates are on the move.
Are you getting the best deal on your mortgage?
The Reserve Bank of Australia’s recent cash rate cut presents an opportunity for homeowners to reassess their mortgage. With rates heading downward, it’s the perfect time to refinance, consolidate debt, or increase repayments to pay off your loan sooner. Take control of your financial future and explore your options now.
How to buy a property when you’re self-employed
Securing a home loan when you’re self-employed can be challenging, as lenders often view your income as less predictable and your financial position more complex. Strengthening your finances with stability and transparency can improve your chances. This article shares practical tips to help you secure better loan options, lower rates, and more lender interest.
The pros and cons of paying for LMI
(lenders mortgage insurance)
Lenders mortgage insurance (LMI) often gets a bad rap, but it can open doors for borrowers with smaller deposits. While LMI adds costs, it enables buyers to enter the property market sooner, potentially avoiding years of savings and rising property prices. Understanding LMI’s role is key to making informed decisions.
How to prepare for buying an investment property
Thinking about buying an investment property in 2025? The key to success starts with making yourself as creditworthy as possible. From increasing savings to understanding loan options and deposit requirements, there’s a lot to consider. Here’s how to set yourself up for a strong start.
2025 Money Moves:
Tips for Homeowners, Buyers, and Business Owners
The new year presents an ideal opportunity to reassess your finances. Whether you’re planning to buy property, managing a home loan, or running a business, there are key actions you can take to improve your financial situation. From enhancing your credit score to exploring refinancing options, small changes can make a big impact.
How the property market looks as we head into 2025
Australia’s property market is shifting, with a clear divide between strong and weak performers. While Brisbane, Perth, and Adelaide see robust growth, Sydney, Melbourne, Canberra, and Hobart face slower gains. As interest rate cuts loom in 2025, understanding regional trends will be essential for buyers and investors alike.