Tailwinds

Since May, the continued growing momentum has been compounding, and the buyer pool has been filling up. 

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With a now 100% chance of a rate cut on Tuesday, based on market pricing, the third consecutive cut, combined with expectations of three by Christmas, is giving buyers confidence to take on larger mortgages and, to be fair, urgency to transact.

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This week, we have seen several clients buy at notably higher price points than we have seen regularly over the past couple of years. However, surprisingly, this occurred at a time that is usually a quieter period in late June, when clients are preparing for spring rather than making purchases. 

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While confidence in taking on debt at the lower end has been consistent and arguably even higher over the past couple of years as First Home Buyers continue to enter and more importantly investors decide to spend less, larger mortgages have been more complex to digest for buyers, as many did not want to have large owner occupier mortgage repayments at higher rates. 

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However, as rate cuts accumulate, buyers will naturally view rates and repayments as more enticing, as they are likely to have a 4% rate in front of them by year-end and potentially approach 4.5% by early 2026. 

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We are likely to see many more families want to upgrade to a home that matches their family's long-term plan or consider investing in a more expensive investment property, knowing the cash flow will be manageable, particularly as the cost of living feels more stable. 

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Unfortunately, however, we need to accept that the window of opportunity for the best buying has well and truly passed; you cannot go back in time wishing you had acted sooner. 

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With School Holidays starting today in NSW and VIC, agents' phones diverted to their associates, it doesn't make sense to list your property until late July and by then we believe buyers will want to act fast, eating up any new quality listings with fear that if they miss out it could cost them $10,000s every week. 

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As you know, we are anti-hype and see ourselves as trusted advisers who call it as it is. But in that vain, If you are looking to buy your first home, upgrade, or invest in a property, we cannot stress this enough: you want to be on the plane to benefit from the tailwind of rate cuts and higher borrowing capacity, rather than waiting until 2026 and miss the bounce confidence will bring.

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