Mortgage holders and property investors in affluent suburbs of Sydney and Melbourne are poised to gain significantly from the Reserve Bank’s recent 0.25 per cent rate cut, according to property expert Michael Yardney from Metropole Property Strategists. He notes that homeowners in these “premium” areas can expect notable increases in property prices.
Yardney anticipates a renewed interest from investors in Melbourne, particularly since property values in the city have generally declined. He suggests that the rate cut may restore investor confidence, especially as affluent homeowners, who have previously held back, may now pursue their property plans.
However, not everyone stands to benefit equally. Young Australians and struggling mortgage holders may continue to face challenges, as the rate cut’s advantages are more likely to favour those with substantial equity and higher incomes. Historical trends indicate that a one per cent rate drop can lead to a 19 per cent rise in property values, primarily within premium markets.
Yardney expects immediate repercussions at upcoming auctions in both cities, suggesting that this rate cut may stabilise the declining prices rather than spark a new property cycle. The improvements in auction clearance rates could indicate a resurgence of buyer interest in the coming weeks, particularly in Melbourne and Sydney’s housing markets.