The Reserve Bank has kept the cash rate at 3.60% in late September. Governor Michele Bullock noted that inflation is easing but its decline has slowed, and she warned the housing market is in a “very difficult” phase. The Board’s tone was cautious: policymakers will watch the data meeting by meeting, meaning any rate cut is unlikely soon. In fact, market odds of a November rate cut plunged after the RBA’s statement. In this context, buyers should remain prudent: don’t bank on a quick rate relief and plan finances at today’s rates.
Key takeaways for buyers and investors
- Timing: Don’t assume a November cut is on the cards. Market pricing now shows only ~35% odds of a near-term cut. Plan for rates to stay around current levels for a while.
- Budgeting: With rates likely on hold, borrowers should build strong repayment buffers. In other words, set your budget as if rates will stay at 3.6% for the foreseeable future. This means being cautious about stretching to the absolute limit of your loan affordability.
- Preparation: Even as rates hold, housing demand is still high in many areas. Competition remains fierce because advertised listings are very tight (roughly 20% below normal). That means having finance pre-approval and using conditional offers. In practice, be ready to move quickly on good properties – but always protect yourself with finance clauses and building inspection conditions.
- Location choice: Not all markets are equally frenzied. For example, Brisbane home values jumped +1.2% in August, whereas Melbourne rose only ~0.3%. This suggests buyer competition is stronger in some cities. As a buyer’s agent would advise, consider suburbs where new listings are picking up (easing competition) rather than areas with ultra-tight stock. That can give you more negotiation room.
- Investor perspective: If you’re buying to rent or invest, focus on fundamentals. Under a scenario of “rates on hold then gradual cuts”, look at rental yield vs expected growth. Even if prices rise, make sure the cash flow works at current rates. Stress-test the numbers: can the property still cover costs (and loans) if rates stay higher for longer? And remember, tight supply can push rents up too – a potential plus for investors.
Overall, the RBA’s decision underscores that inflation control remains the priority, so borrowers should remain cautious. Housing momentum has been supported by earlier rate cuts and low supply, but the door isn’t open to easy money just yet.
How a buyer’s agent can help
As buyer’s agents, we guide clients through exactly these challenges. We save you time by identifying suburbs and listings that suit your needs – and we know where supply and demand are moving. Our team at Key2Dreamz has the local market expertise to craft strategies that keep you competitive and protected. Ready to talk? Book a free consultation session or call us at +61 439 260 917 to discuss your goals. Let Key2Dreamz help you navigate the market with confidence.