Despite high interest rates and costs of living, the Australian property market is very active for purchases. The number of listings is up compared to the same time last year, with new listings up 7.8% in July, according to CoreLogic. This was 5.1% higher than the historic five-year average.

This means there is more choice for buyers currently than there has been, on average, over the last few years. This presents a unique opportunity to enter the market. 

Why’s that?

Well, with the official cash rate at 4.35% mortgages have become more expensive and have significantly impacted consumers' borrowing capacity. This, in turn, has reduced competition among buyers, particularly given that there are more listings comparatively. 

Buyers who are in good financial standing – and, even better, if they’ve been pre-approved for a home loan – now have more negotiating power which can lead to better deals.

Moreover, a lack of competition among buyers means there is less upward pressure on home prices in some capital cities such as Sydney. 

However, industry forecasts suggest that interest rates may begin to decrease as early as November, with the Commonwealth Bank predicting the Reserve Bank of Australia will cut rates then. Likewise, Westpac is forecasting a rate cut to 4.10% before the end of the year. 

The other two of the big four banks are a bit more conservative in their estimates, expecting rates to be cut by mid-2025.

When rates do drop, more buyers will likely enter the market. Consequently, many experts predict property prices will begin to climb as demand increases. For example, Domain is forecasting house prices will increase by between 3 and 6%, and 2 to 4% for units over the 2024-25 financial year.

Entering now means you can get ahead of these expected price increases.

Then there’s the rental market. Conditions there have remained extremely tight with weekly rents in Sydney rising 7.1% for houses and 7.5% for units in the 12 months to June 2024, according to Domain. 

While rental growth is easing, a supply-demand imbalance is expected to keep upward pressure on prices. 

For investors, rental income can help offset the current high borrowing costs, making property investment a viable option now even in a high-interest environment. 

For first-home buyers, buying your home now means you can get ahead of future rental rate increases. Or, if buying in your ideal location is not financially possible, you could consider rentvesting. 

Looking to secure finance to buy property? As an award-winning mortgage broker in Sydney with over 390 five-star Google reviews, Eventus Financial can help. Schedule a no-obligation consultation with Alex to get started.