Australian dwelling prices have tracked sideways recently after experiencing a bounce following the 0.25% interest rate cut by the Reserve Bank of Australia (RBA) in February.
CoreLogic’s daily dwelling values index has reported only a 0.2% increase in values at the combined 5-city level over the past 28 days, with Sydney and Melbourne recording rises of only 0.1%.
Following Labor’s election victory and the expectation of imminent interest rate cuts, buyer interest has begun to stir.
This weekend’s preliminary auction clearance rate from CoreLogic was above 70% for the second week in a row, led by Melbourne.
In his weekly market wrap on YouTube, prominent Sydney real estate agent and auctioneer Tom Panos said that buyers were anxiously awaiting rate cuts.
“That’s given buyers a little bit of anxiety. I think there will be a lot more buyers out there when rates drop”, Panos said.
Panos also noted that Labor’s housing policies would be stimulatory for house prices. These include:
- Labor’s expanded Help-to-Buy shared equity scheme, which provides 10,000 first-home buyers with 40% of the purchase price of a new home and 30% for existing homes per year.
- Labor’s 5% deposits for all first home buyers, which come into effect on 1 January 2026.
“When you add up all those initiatives, you still end up having a shortage of properties and that means prices will continue to go up”, Panos said.
Panos also noted that Labor’s 1.2 million housing target is “going to end up being short by 400,000 to 500,000”.
“They have the same issues that everyone has at the moment in the real estate game: high material costs, labour shortages, planning delays, the list goes on”.
The upshot is that the combination of falling interest rates, Labor’s demand-pumping policies, ongoing high immigration, and stunted supply are likely to drive prices higher.
I discussed these issues in my latest Treasury of Common Sense interview on Radio 2GB/4BC.
