Professionals Real Estate 
How interest rates are affecting buyer confidence
Interest rates have a powerful influence on the property market. Even a small change can shift buyer demand, affect borrowing power and alter the confidence people feel when making big financial decisions.
Latest interest rate news
The RBA delivered its third rate cut of the year in August 2025, lowering the cash rate to 3.60 per cent.
This decision was grounded in ongoing inflation easing as well as a slowing economy and gently rising unemployment.
The RBA noted the potential for further cuts, although structural constraints like weak productivity may limit how much further the rate can be lowered.
Even though rates are higher than the lows reached during the pandemic, they have prompted fresh buyer activity. The annual growth trend ramped up from a low of 3.6% over the 24/25 financial year to a 4.1% rise
over the 12 months to August.
Changes are lifting confidence
Australia’s housing market has kicked off spring 2025 with renewed momentum.
NAB’s Residential Property Index rose to +44 in the June quarter, its highest in a year, driven by rate cuts and improving buyer confidence.
Consumer sentiment has also lifted, with the Westpac–Melbourne Institute saying home buyer sentiment is at its highest level in more than four years.
Meanwhile, real estate research company Cotality reported that Australia’s Home Value Index rose 0.7% in August, the strongest gain since May 2024.
Listings remain low and clearance rates are high, giving vendors an edge as buyers act quickly in a tight market as the 2025 spring season gets underway.
Is Now the Time to Buy?
With interest rates falling and the 5% deposit scheme being brought forward for first home buyers, conditions are lining up for buyers and investors alike. Incentives and affordability are increasing demand, which may push prices up further in the near future.
For buyers, acting sooner could mean getting ahead of the next round of price growth.
Sellers: Take Advantage of Renewed Buyer Interest
For sellers, this shift in confidence is good news. More active buyers, improved affordability and a sense of urgency mean your property is more likely to attract strong competition. Listing while demand is on the rise could help you achieve a faster sale and a better result.
Plan Your Next Move
Whether you are buying or selling this spring, you can expect to be doing so in a busy market, almost regardless of where you live. Speak with your local Professionals agent to understand how interest rate changes and renewed enthusiasm affect your situation and take the next step with confidence.
