Australia's two largest real estate chains have indicated they’re expecting the property market’s current price growth momentum to continue into summer, despite the RBA’s decision to keep interest rates on hold.
The central bank decided to maintain the cash rate at 3.6% at its November meeting, with the accompanying statement and public comments by RBA Governor Michele Bullock indicating the chances of a rate cut in December are almost non-existent.
However, LJ Hooker and Ray White real estate both believe stronger-than-expected home price growth so far this year, plus limited stock, strong buyer demand and increased first-home buyer activity, point to a busy summer in the property market.
The Ray White view
Australia’s largest real estate franchise company, Ray White, says its latest monthly home price data for October confirms “that the housing market has regained remarkable strength.”
The report, which uses figures from the national real estate chain’s own data arm - Neoval - says the median Australian house price increased 1.1% to $940,000.
That’s pushed annual house price growth to 10.6%, the first double-digit annual rise since the pandemic property boom of 2021-22.
The Neoval data shows growth in median unit prices was even stronger during October, up 1.4% to $710,000, with annual growth now at 9.2%.
“In our September report, we noted that double-digit annual growth was likely to be confirmed by the end of the year,” Ray White’s Chief Economist, Nerida Conisbee, says.
“That milestone has come sooner than anticipated, driven by stronger-than-expected October gains and continued tight supply across most markets.
“This underscores how resilient demand has remained through Spring,” she says.
Nerida Conisbee says the three cuts already delivered by the Reserve Bank in this easing cycle (in February, May and August) “have definitely accelerated things.”
“But we’ve also got the new expanded 5% deposit scheme, and that’s really pushed things up at the cheaper end (of the market),” she says.
Ms Conisbee says she believes that if the RBA had cut the cash rate again at its November meeting, it would have “added more fuel to the fire” as far as the booming property market is concerned.
Despite no more rate cuts this year, she indicates it's unlikely the brakes will be slammed on home price growth.
“I don’t think we’ll necessarily see a stopping of the momentum that we’ve seen at the moment.
“Smaller capitals and regional areas are expected to remain the key outperformers into early 2026, supported by population growth, tight supply and comparative affordability.”
The LJ Hooker view
While the RBA keeping rates on hold is obviously a blow for existing mortgage holders, Australia’s second largest real estate chain says the decision is unlikely to impact property buyer confidence.
It expects strong demand “to continue throughout late Spring and into Summer”.
LJ Hooker’s Head of Research and Business Intelligence, Mathew Tiller, says while new listings have lifted towards the end of the year, they are still below average, creating strong competition between buyers.
“Stable rates are a good thing as they provide buyers with some certainty to plan, and this keeps enquiry levels strong,” he says.
As for vendors who might have been hoping a fourth rate cut might lead to more market activity - and therefore higher prices - Mr Tiller says there are “plenty of reasons to go to market now”.
“Prices continue to edge higher, increasing month on month.”
“Buyers are motivated as we head into summer, particularly families looking to lock in a new home before the start of the new school year,” he says.
The LJ Hooker Head of Research says there’s also plenty of property investors looking to buy, spurred on by good rental yields and low vacancy rates for rental properties.
With levels of housing stock for sale down in most capital cities, Mathew Tiller says there’s strong attendance at open home opportunities.
Auction clearance rates are also holding at around 70%, signalling solid demand and placing upward pressure on prices.
As for the RBA’s next move, Mr Tiller expects the central bank will want to see clearer progress in its battle against inflation, even with a softer jobs market.
He points out that the three rate cuts so far in this easing cycle “are still flowing through the market, and the RBA will want to see the full effect it has on the economy.”
Looking specifically at the prospects for the property market, LJ Hooker’s Mathew Tiller says that while the “Spring selling season” in Australia gets most attention, buyer interest is expected to remain elevated throughout early Summer.
He believes many house-hunters will use the Christmas break to reassess their plans, browse online listings and attend inspections.
“Listing over summer or even launching a pre-market campaign allows vendors to position themselves ahead of the competition and beat an influx of listings that typically arrives in late February or March,” Mr Tiller says.
“It can also be a good time to showcase lifestyle features such as outdoor entertaining and swimming pools.
“There is the added advantage of daylight savings allowing for mid-week evening inspections,” he says.