Autumn property market marching forward as the rate cut lifts listings

HOUSING industry leaders say the autumn property market is continuing its strong start to 2025.

But they expect the upcoming Federal election will mean a slowdown – and continued growth will depend on global economic headwinds.

SQM managing director Louis Christopher said: “Overall, it remains a strong start to 2025 when it comes to residential property listings activity.

“Total listings are up by 4%, year on year.

“This in part driven by a rise in new listings activity, however I note that there has been a substantial rise in old listings for Sydney and Melbourne, indicating an overhang of sorts for those two cities.

“Going forward, it is likely we will record another rise in listings for the current month of March.

“The then the listings market is likely to go into a bit of a hiatus for the April public holiday period and will stay that way until the Federal Election has concluded.”

John McGrath CEO John McGrath said: “The autumn auction season is now in full swing, with more than 2,500 homes nationwide going under the hammer each week. 

“Early signs are very positive, with the national clearance rate hovering around the mid-65% mark in February. That’s about the level we saw in early Spring last year before the market began to cool off.

“The first rate cut from the Reserve Bank is likely to boost market sentiment and should spur on buyer activity.  

“But it does signal the start of a downward trend in rates (as long as inflation continues to fall) and this will give people confidence that we are past the worst it’s going to get in this cycle.”

Between November 1 and January 31, CoreLogic data shows home values fell 1.4% in Sydney, 2% in Melbourne, 0.8% in Hobart and 0.5% in Canberra.

More rate cuts – whenever they come – are likely to push up home values, he said.

“In fact, CoreLogic research shows that for every 1% cut to the cash rate, dwelling values rise by an average of 6.1%. 

“Some markets are more responsive to rate cuts, with the research showing that popular family suburbs with higher median values tend to get a greater price uplift as rates go down.”

In Sydney, for example, the research shows a 1% rate cut pushed median house prices up 19% in Leichhardt and the Sutherland-Menai-Heathcote area, 18% in Warringah and 17% in Parramatta. 

Ray White chief economist Nerida Conisbee said: “While many analysts are pointing to February as the start of the market’s recovery, our data clearly shows that January marked the true turning point.

“This earlier-than-recognised momentum suggests buyers were already responding to changing economic signals, particularly the increasing likelihood of interest rate cuts.

“While expectation of interest rate cuts helped fuel the market’s January revival, the outlook for monetary easing has become increasingly uncertain.

“Rising economic troubles in the United States and higher levels of global protectionism are introducing new variables that could potentially reignite inflation.

“The path to interest rate cuts is becoming less clear as global economic headwinds intensify.”