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What happens to property prices when interest rates fall?
2 months ago
What happens to property prices when interest rates fall?

House prices were analysed one month after the Reserve Bank lowered rates in previous cycles, focusing on Australia’s capital cities. The research specifically examined instances where cuts were made following at least six months of unchanged rates.

Since 2011, there have been four such instances: November 2011, February 2015, May 2016, and June 2019.

Sydney saw the most substantial price increases after rate cuts, followed by Melbourne and Canberra. These cities, having the highest property prices in Australia, are more sensitive to changes in borrowing costs.

In contrast, Perth and Darwin showed minimal impact during these periods, due to their relatively stagnant markets and lower sensitivity to interest rate fluctuations.

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