The latest inflation figures,
Have sparked renewed optimism in the property market, with mounting evidence suggesting we’re approaching our first cash rate cut since the aggressive hiking cycle began.
As your mortgage specialist, Mortgage Motion is keeping a close eye on these developments to help you make informed property decisions in 2025.
November’s 2023 trimmed mean, the RBA’s preferred measure, has declined to 3.2%, edging closer to the target band. This encouraging trend has prompted Commonwealth Bank to forecast four rate cuts this year, potentially beginning as early as February 2025. For property investors and homeowners alike, this could translate into significant savings.
Let’s put these potential savings into perspective.
Based on current projections, if you’re carrying a $750,000 mortgage with 25 years remaining, you could see your monthly repayments reduce by approximately $115 with each 0.25% cut.
If all four predicted cuts materialise, that’s a substantial monthly saving of $448 by year’s end. For investors with multiple properties, these savings could be game-changing for portfolio cash flow.
However, as your broker, I must emphasise the importance of cautious optimism.
While CBA is betting on a February cut, other major banks are more conservative, anticipating the first reduction around May. The RBA’s decision will heavily depend on upcoming data, particularly the quarterly CPI figures due on 29 January and labour force data mid-month.
What does this mean for your property strategy?
If you’re considering expanding your portfolio, now might be an opportune time to secure properties before potential market movements. Historical patterns show that property prices often react positively to rate cut cycles, potentially leading to increased competition and rising values.
For existing borrowers, don’t wait for rate cuts to optimise your position. The current market offers excellent refinancing opportunities, with lenders competing aggressively for quality borrowers. I’m seeing some particularly attractive deals for investors with strong equity positions and solid rental yields.
Most encouragingly, consumer confidence is building, with over 56% of Australians expecting cost of living relief this year. This sentiment often translates into increased market activity and tenant demand – both crucial factors for property investors.
Remember, while rate cuts appear likely, the timing and extent remain uncertain. I recommend reviewing your portfolio’s financing structure now to ensure you’re well-positioned to benefit from any market shifts.
Feel free to reach out to Mortgage Motion for a complementary personalised assessment of your lending options
