{"id":5491,"date":"2024-10-03T09:33:11","date_gmt":"2024-10-02T23:33:11","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5491"},"modified":"2024-10-03T09:33:11","modified_gmt":"2024-10-02T23:33:11","slug":"could-rate-cuts-mean-house-prices-heat-up-again","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/could-rate-cuts-mean-house-prices-heat-up-again\/","title":{"rendered":"Could rate cuts mean house prices heat up again?"},"content":{"rendered":"

\"\"Thinking of holding off buying until interest rates fall? Wait until you see what could happen to home prices. Here\u2019s why it could make sense to buy sooner rather than later if you\u2019re home loan-ready.<\/strong><\/p>\n

September saw the nation\u2019s official cash rate kept on hold once again. But there is growing consensus that the RBA may cut the cash rate at one of its next few meetings.<\/p>\n

Several of the big banks, including\u00a0Westpac<\/a>\u00a0and\u00a0NAB<\/a>, are expecting rate cuts in the first half of next year.<\/p>\n

Others, such as the Commonwealth Bank, are forecasting a\u00a0rate cut in time for Christmas<\/a>.<\/p>\n

While lower rates can\u2019t come soon enough for many struggling mortgage holders, there is one issue that has been largely overlooked, and that\u2019s how home prices might respond to a cash rate cut.<\/p>\n

Here\u2019s what the experts say may happen.<\/p>\n

How home values could respond to rate cuts<\/h3>\n

First up, it\u2019s worth pointing out that higher rates have been with us since\u00a0mid-2022<\/a>.<\/p>\n

Yet property values have climbed rather than cooled since then, with the national median value rising from\u00a0$752,507 in June 2022<\/a>\u00a0to\u00a0$807,110 today<\/a>.<\/p>\n

With that in mind, if interest rates fall, many pundits believe home values could head even higher.<\/p>\n

The question is, how much higher?<\/p>\n

Ray White Economics<\/a>\u00a0has done the maths based on past property price movements following a long-awaited rate cut.<\/p>\n

According to their analysis, home prices nationally could rise by 0.6% within just one month of a rate cut.<\/p>\n

REA Group has teased out the numbers further, saying that based on current median values, a\u00a00.6% price rise could add an extra $5,000<\/a>\u00a0to the average cost of a home across Australia.<\/p>\n

And that\u2019s for just one rate cut.<\/p>\n

\u200b\u200bSQM Research director Louis Christopher says four cuts next year, while still a more remote possibility, could cause a\u00a0huge rebound<\/a>\u00a0in property markets that have recently been weaker \u2013 such as Melbourne and Sydney.<\/p>\n

The impact in your state capital<\/h3>\n

Exactly how home prices respond to rate cuts is likely to vary between locations.<\/p>\n

Here\u2019s what Ray White Economics and REA Group say could happen in capital cities in the first month after one official rate cut:<\/p>\n

\u2013 Sydney:<\/strong>\u00a0values rise 1.4% adding an extra $15,300 to the median property value.
\n\u2013 Melbourne:<\/strong>\u00a0values rise 1.0%, pushing up the median price by $8,000.
\n\u2013 Brisbane:<\/strong>\u00a0values climb 0.4%, adding $3,400 to home prices.
\n\u2013 Canberra:<\/strong>\u00a0values increase 0.5%, pushing up prices by just over $4,000.
\n\u2013 Adelaide:<\/strong>\u00a0values rise 0.3%, adding $2,300 to property prices.
\n\u2013 Perth and Darwin:<\/strong>\u00a0no change to values.<\/p>\n

It\u2019s worth stressing that these numbers reflect how the market has responded to rate cuts in the past. Things could be very different in the future.<\/p>\n

Perth, for example, currently has one of the nation\u2019s\u00a0strongest property markets<\/a>, and Ray White Economics suggests that home values there could rise further following a cut to the cash rate.<\/p>\n

Should I buy now?<\/h3>\n

Holding out for interest rate cuts may seem to make sense. After all, lower rates can boost your borrowing power.<\/p>\n

But as we have seen, it could also work against you.<\/p>\n

Lower rates may push up home prices, and potentially fuel increased competition among buyers.<\/p>\n

That\u2019s why we believe the \u201cright\u201d time to buy is when you are ready.<\/p>\n

And today\u2019s spring market comes with the added advantage of more choice for buyers.<\/p>\n

According to CoreLogic, the flow of\u00a0freshly-advertised housing stock<\/a>\u00a0hasn\u2019t been this high at this time of the year since 2021.<\/p>\n

So if you\u2019re interested in buying your first or next home (with the potential benefit of getting one or several rate cuts soon after your purchase), get in touch with us today.<\/p>\n

We\u2019ll help you assess your borrowing power in the current market, and if you find the right house, we\u2019ll help you find the right loan for it.<\/p>\n

Disclaimer:<\/strong>\u00a0The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.<\/p>\n","protected":false},"excerpt":{"rendered":"

Thinking of holding off buying until interest rates fall? Wait until you see what could happen to home prices. Here\u2019s why it could make sense to buy sooner rather than later if you\u2019re home loan-ready. September saw the nation\u2019s official cash rate kept on hold once again. But there is growing consensus that the RBA […]<\/p>\n","protected":false},"author":23,"featured_media":5492,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[110],"tags":[],"class_list":{"0":"post-5491","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-home-loans","8":"entry"},"yoast_head":"\nCould rate cuts mean house prices heat up again? · FinancialPlus Mortgage Broker Gold Coast<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/financialplus.com.au\/could-rate-cuts-mean-house-prices-heat-up-again\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Could rate cuts mean house prices heat up again? · FinancialPlus Mortgage Broker Gold Coast\" \/>\n<meta property=\"og:description\" content=\"Thinking of holding off buying until interest rates fall? 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