Rate Cuts Spark Nationwide Rush Among Home Buyers

Australia’s latest interest rate cuts are driving a new wave of urgency among home buyers as more people rush to secure mortgage pre-approvals. Motivated by fear of missing out and rising property prices, many are moving quickly to enter the market. The Reserve Bank’s second cash rate cut this year has become a turning point by increasing borrowing power and triggering strong interest from both investors and first-home buyers. However, this surge in activity may push property prices higher in the short term, reducing affordability for some.

This boost in momentum follows a major interest rate cut from the Reserve Bank of Australia. Responding to global economic instability, the central bank has moved to ease monetary policy. This marks the second cut in a row and effectively ends a long stretch of rate hikes that had made borrowing more expensive over the past three years. As conditions ease, banks and mortgage brokers are seeing a sharp rise in enquiries from hopeful buyers.

Equifax, a credit data firm, reports that mortgage pre-approvals through brokers rose 24% in March compared to the same period in 2024. February experienced a 12.5% increase, and April followed with a 10.6% jump. These figures reflect steady growth since the first cut. One major broker network noted a 30% rise in pre-approvals from November 2024 to May 2025, while usage of borrowing capacity calculators climbed 65% over the year.

The broader market outlook suggests demand will continue to rise, though this could push housing prices even higher. Analysts from several major banks expect another Reserve Bank rate cut before August, and some lenders predict it could arrive sooner. HSBC forecasts that Sydney home prices may rise 4% in 2025 and another 8% in 2026. Melbourne could see gains as high as 7%, suggesting that many current buyers are aiming to beat future price increases.

Property markets in cities like Brisbane, Perth and Adelaide are already seeing price growth of up to 10% annually, according to recent data from Cotality. Elevated competition and rising investor interest are making it harder for some local buyers to compete. Even regional centres such as Mackay in Queensland are becoming less affordable, with the median home price increasing 22% over 12 months. Despite lower rates, this makes it difficult for some to break into the market.

Financially, the effects of lower rates are clear. Canstar estimates that a single person earning an average salary of $103,000 may now qualify for an extra $12,000 in borrowing capacity. Couples with dual incomes could access an additional $23,000. These increases in loan potential might help some buyers re-enter the market, although not all will benefit equally, particularly in areas where housing demand exceeds supply.

For many buyers, the emotional toll is growing. Anxiety about being priced out is rising, even as lower repayments bring a sense of renewed hope. Buyer’s agents in Sydney and other major cities are reporting long waitlists and a spike in enquiries, pointing to a rapidly accelerating housing market.

Source: Australian Financial Review, CBA, Trading Economics, Macquarie