Good news for mortgage holders as the Reserve Bank of Australia cut the cash rate in May by 0.25 per cent.

While the cut will be welcomed by many, it has been driven primarily by continued global uncertainty brought about by the election of Trump in the US.

While extremely high tariffs put on US businesses and consumers will primarily impact local residents in that country, the impact on China specifically has the potential to impact Australia’s economic growth.

In addition, while Australia is not a major trading partner with the US, supply chain disruptions and the potential for global pricing by US companies is likely to impact our inflation rate.

This could be offset somewhat by lower prices for products out of China however the extent to which this happens is highly uncertain.

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Housing market already showing strong momentum

The cut comes at a time when Australia’s housing market is already demonstrating remarkable resilience.

April data confirmed the acceleration of price growth that began in January, with house prices nationally rising by 0.4 per cent to reach a median of $917,433, representing an annual growth of 5.2 per cent.

The unit market showed even stronger monthly momentum with prices increasing by 0.5 per cent to $685,637, delivering a yearly growth rate of 4.6 per cent.

This widespread acceleration suggests we’re entering a new phase in the market cycle, with 13 out of 14 regions showing accelerating growth when comparing recent three-month periods.

RBA Governor Michele Bullock during a press conference. Picture: NewsWire / Nikki Short

Unemployment concerns on the horizon

The global economic slowdown triggered by US-China trade tensions raises the spectre of rising unemployment in Australia.

As export demand potentially weakens and businesses face supply chain disruptions, job security could deteriorate across several sectors.

However, history suggests the housing market demonstrates surprising resilience in the face of unemployment challenges.

During previous economic downturns, including the GFC and Covid-19 pandemic, property prices showed remarkable stability compared to other asset classes, particularly in metropolitan areas.

This counterintuitive resilience can be attributed to several factors: interest rate cuts typically accompany rising unemployment, offsetting affordability challenges; mortgage holders prioritise housing payments over other expenses; and property is viewed as a safe haven during economic uncertainty.

While unemployment pressure may create headwinds, it’s unlikely to derail the current momentum in Australia’s housing market.

While the cut will be welcomed by many, it has been driven primarily by continued global uncertainty.

Interest rate cut to fuel further price growth

Today’s modest 0.25 per cent cut will still direct additional money into the housing market, providing borrowers with increased capacity. For a household with a $750,000 mortgage, this cut represents savings of approximately $115 per month.

Markets are now pricing in additional cuts through the remainder of the year, which will continue to support price growth.

The impact will be particularly pronounced in markets that have already shown strong momentum, including Perth, Adelaide and Brisbane, where annual growth rates have reached 12.2 per cent, 7.8 per cent and 7.3 per cent respectively.

However markets that are currently much slower, such as Sydney and Melbourne have historically been far more sensitive to rate cuts. The cuts today are likely to boost these markets.

Labor buyer-friendly policies adding additional fuel

The recent Labor victory in the federal election adds another dimension to Australia’s accelerating housing market. Labor’s comprehensive housing package, particularly the expansion of the five per cent deposit scheme to all first home buyers regardless of income.

This fundamental shift in housing accessibility will create additional demand pressure in a market already benefiting from interest rate reductions.

By removing the substantial barrier of lenders’ mortgage insurance and the need for a 20 per cent deposit, more buyers will be able to enter the market simultaneously, competing for existing housing stock.

Ray White chief economist Nerida Conisbee

Safe haven in uncertain times

The combination of interest rate cuts, Labor’s buyer-friendly policies, and global economic uncertainty creates a perfect environment for accelerated price growth across Australia’s property markets.

As financial markets worldwide experience turbulence from Trump’s “Liberation Day” tariffs, residential property offers distinct advantages: Greater price stability compared to share markets, tangible asset security with intrinsic utility value, immediate benefits from today’s interest rate cut and supply constraints supporting existing property values.

While today’s rate cut provides immediate relief for mortgage holders, its impact on property prices will likely contribute to accelerating growth for the remainder of 2025.

– This column was supplied by Ray White Group Chief Economist, Nerida Conisbee

The post Nerida Conisbee: Modest cut for now as global turmoil continues appeared first on realestate.com.au.

xA one-of-a-kind Sydney penthouse, sought-after by some of Australia’s biggest names including Nicole Kidman and Aussie John Symond has hit the market again for $30m.

Soaring 43 storeys above The Rocks, a palatial three-level penthouse with private elevator, wellness spa, super yacht-inspired rooftop and self-contained staff quarters has earned its moniker as The Skyhouse.

Now it’s primed to earn its $30m price guide.

Towering over the harbour and crowning The Cove – designed by acclaimed Harry Seidler in the early 2000s – the apartment has been owned for approximately 15 years by Rod Salmon, CEO of COHO Property, former hotelier, race car driver and owner of super yacht Oneworld. The grand residence boasts a sweeping 270-degree harbour panorama capturing all of Sydney’s icons and views out to the Blue Mountains.

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4301/129 – 135 Harrington Street, The Rocks, NSW 2000. Picture: realestate.com.au

The home has a $30m price tag. Picture: realestate.com.au

High profile house hunters were rumoured to have circled the penthouse when it was last listed – but never sold – in 2018, with Nicole Kidman and John “Aussie” Symond among the interested parties. The Skyhouse has also spent time as a rental, reportedly leased to a Kuwaiti billionaire for $8000 a week.

During its last appearance on the market, The Skyhouse was asking $21m, however the savvy entrepreneur has completely renovated the 687sq m apartment since. Leading architect Stefan Elliot was hired to blend mid-century design with gallery-like interiors finished in tactile stone, brass, and bespoke joinery.

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Contemporary luxury. Picture: realestate.com.au

The home has been completely renovated. Picture: realestate.com.au

The pool deck.

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Chana Levy, director of Levy Property Group, is marketing the penthouse alongside co-agent Nathan Antunes, a former race car driver who was the first Australian selected for the Red Bull Junior Team and a GT3 driver with Audi and McLaren.

“This residence is more than a home – it’s a landmark in Sydney’s luxury landscape,” Ms Levy said.

“We’re seeing growing demand from global buyers who want the scale of a private estate, but with the security, exclusivity, and harbour front access only a penthouse like this can provide.”

Nicole Kidman was interested in the home. Picture: Getty

Despite its $30m price guide, the home represents more bang for buck at approximately $43,000 a square metre, compared with current sales and listings in the area exceeding $100,000 a square metre.

Mr Antunes agreed that the unparalleled apartment is a unique listing even for Sydney’s prestige property market.

MORE: What homes will be worth in each suburb by 2030

Bridge views too. Picture: realestate.com.au

“The SkyHouse is a collector’s piece,” he said.

At entry level there are the majority of everyday living spaces including an expansive combined lounge and living area with a side balcony, as well as an elegant dining zone and cocktail bar framed by walls of glass to showcase the enviable harbour outlook.

A gourmet kitchen includes a vast island bench, high end appliances, plus a full hidden chef’s kitchen with a butler’s entry. This same level also houses a guest suite, office or staff quarters with a private entry, bathroom and kitchenette.

John Symond was another interested potential buyer.

The accommodation floor features a five-star hotel style primary suite with a large ensuite, a dressing room, a harbour-facing personal balcony, plus a luxury day spa area with a jacuzzi, glam corner and space for a massage table. Each bedroom features deluxe ensuites and there is a gym and home office on the same level.

The showstopping top floor has a unique terrace designed like a superyacht’s deck complete with a bar, spa, sauna and uninterrupted views.

Additional features of The Skyhouse include smart home automation, a three-car secure garage, a 24-hour concierge and resident amenities such as a pool and full-scale gym.

Levy Property Group is holding an exclusive invitation-only event at The Skyhouse on Thursday, May 22 where potential purchasers and buyer’s agents will get a first-hand look at the rare private home.

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The post The Skyhouse at Sydney’s The Rocks for sale for $30m appeared first on realestate.com.au.

As more Melbourne homeowners embrace the growing trend of downsizing, the demand for luxurious, low-maintenance properties continues to rise.  

There are approximately 149,000 downsizers in Australia, according to Nielsen’s Consumer and Media View 2024, highlighting a growing trend in downsizing among Australian homeowners. 

With demand for premium homes that cater to empty nesters, retirees and professionals expected to increase, the newly released YarraBend Signature Club Penthouses in Alphington by Glenvill Developments have been designed to meet the market’s needs. 

For many in this stage of life, the benefits of downsizing are hard to ignore, offering greater financial flexibility, reduced maintenance burdens and the opportunity to enjoy a simpler lifestyle closer to urban conveniences.  

Glenvill Developments’ Director of Sales and Marketing, Sam Tucker, says more than anything downsizers are seeking more freedom in their lifestyles.  

“YarraBend offers the best of every world and it’s where nature meets the city,” he says.  

In addition to ease of living, location is key for many downsizers. Proximity to amenities, public transport and green spaces, all while staying close to the city, is becoming a significant factor in choosing a new home.  

“With 300m of river frontage overlooking Kew, YarraBend is located on the fringe of the city where residents can ride along the banks of the river and within 20 minutes be in the CBD. They can also choose to catch the bus from their doorstep and enjoy the priority bus lane in peak hour to reach the city within 10 minutes,” Tucker says. 

City style surrounded by nature

When it comes to downsizing, many homeowners are seeking properties that deliver a combination of luxury finishes and functionality. 

Features like spacious interiors, premium finishes, access to health and wellness facilities and vibrant community spaces are high on the list of priorities. 

Proximity to essential amenities like shopping, dining and public transport is also crucial.  

Recent projections indicate a significant number of Australians approaching retirement in the coming years. The Australian Bureau of Statistics forecasts that by 2026, more than 22% of Australians will be aged over 65, up from 16% in 2020, highlighting the need for properties designed with downsizers in mind.  

With this in mind, YarraBend Signature Club Penthouses aim to provide a mix of luxury and practicality, with panoramic views of the Dandenong Ranges and Melbourne’s city skyline to boot. 

“We are redefining luxury in our first penthouse release at YarraBend with standout travertine islands up to 5.5m long, wine cellars, bars, Smeg’s most advanced Dolce range of appliances, options from two to five bedrooms and private rooftops that include pools, spas and outdoor kitchens,” Tucker says. 

Amazing amenities without the maintenance

In a unique market offering, YarraBend’s penthouse owners will be given exclusive membership to YarraBend’s Signature Club. 

“Our Signature Club offers an unprecedented suite of services, including a private golf membership, a chauffeur, valet car detailing, spring cleaning, virtual concierge, live-in building manager, room service and celebrity chef dining experiences in our new food and dining precinct, The Bend,” Tucker says. 

Exclusive amenities include a private gym, golf simulator, theatre, billiards room, library, bar, plus a subterranean health and wellness offering. If this isn’t enough, YarraBend also offers shared resident amenities of an indoor and outdoor 25m pool, onsen-style outdoor spas, a kids’ play room, massage rooms, a Techno-gym and pilates/yoga studios.

A major new major shopping centre of around 25,000 sqm with medical precinct will begin construction at YarraBend this year, with committed tenants including Coles, Aldi, Reading Cinemas, a new food court and much more.

Downsizing with confidence

Glenvill, Australia’s oldest private developer, has a longstanding reputation for delivering high-quality, luxury residential projects.  

Established in 1958, the company pioneered the knock-down rebuild market and has a $2b+ development pipeline nationally.  

“Our housing division is delivering more than 1500 homes annually, and we’re continuing to innovate with projects like YarraBend and beachfront residences in Broadbeach offering some of Australia’s most desirable properties,” Tucker says.  

“Our first customers hadn’t considered, let alone even heard of YarraBend or Alphington before, yet were impressed by the premium finishes and design, exclusive amenities and Signature Club inclusions,” Tucker says.

These first purchasers contracted their Penthouse within seven days of inspecting and prior to launch, making it clear the opportunity to secure one of these exclusive residences may not last long.

The post The exclusive penthouses offering a premium Melbourne lifestyle appeared first on realestate.com.au.

Victorian Premier Jacinta Allan and Treasurer Jaclyn Symes (left) ahead of today’s state budget. Picture: NewsWire/ David Crosling.

An “anaemic” budget has done little to support Victorian homebuyers and owners, despite the state government forecasting rising prices in the coming financial year.

Property industry experts have indicated the Reserve Banks expected interest rate cut will do more to support people planning to buy a home or struggling to pay a mortgage.

Key announcements included a $61m top up to a stamp duty concession scheme that lets those buying yet-to-be built apartments and units pay the tax on just the land component of their future home, with all homebuyers pursuing such homes now able to claim the discount until October 2026.

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It is understood the scheme is expected to support 5000 Victorians across its full term, with those who have already made applications averaging a $25,000 property tax saving on their purchases to date.

Budget papers cited examples where a person buying a $620,000 apartment who would have otherwise paid $32,000 would instead pay $4000, however there is a sliding scale on savings based on how much construction has been done on a development at the time of signing to purchase it – with lower reductions for those who wait for more of the building to be completed.

It is understood that reductions will be applied upon settlement of the purchases, meaning exact numbers will be difficult to predict.

Apartments and units that are part of a strata plan are the only homes eligible for the stamp duty saving being extended in this budget. Picture: Asanka Ratnayake/Getty Images.

This has been paired with a $24m investment to support the state’s Tram and Train Zone activity centres, which is intended to help private developers create 300,000 new homes around key infrastructure locations across Melbourne.

While not covered by the off-the-plan concession scheme, the budget also included $12m to top up the pipeline of housing estate land to the city’s outer west, north and south east, expected to support the private development of 180,000 new houses.

Homeowners looking to make their home more sustainable are also set to benefit from $27.9m to support rebates for 27,000 Victorians to swap out their gas hot water system for more energy efficient alternatives, plus $12m to discount ceiling insulation installations.

In a tacit acknowledgment of the state’s housing affordability crisis and ongoing home loan pain faced by Victorians, the state government will also add $4m to Mortgage Stress Victoria to help fund support including legal advice, financial counselling and social work.

Minister for Housing Harriet Shing said the government were “determined to help more Victorians to find a home they can be proud to call their own”.

Planning minister Sonya Kilkenny said the budget was paving the way for more homes to be built in Victoria. Picture: Valeriu Campan.

Planning Minister Sonya Kilkenny said the government’s goal was to build more homes in inner suburbs that are close to trains and trams, as well as more homes with backyards in the outer suburbs.

Minister for Energy and Resources Lily D’Ambrosio said they were looking to provide long-term support for home energy bills via support payments for heat pump and insulation installations.

However, real estate and construction industry bosses have labelled the budget anaemic and indicated a rate cut by the reserve bank would do more to assist homeowners and homebuyers.

Prominent buyer’s advocate Cate Bakos said an interest-rate cut “would be much more significant than our state government’s budget”.

“I thought it was pretty anaemic for housing, to be honest,” Ms Bakos said.

The buyer’s advocate said her read of the budget was that the state government felt Victoria’s rental crisis had been slowed by a series of rental reforms they have announced, but warned this was a shortsighted view.

Prominent buyer’s agent Cate Bakos has described this year’s budget as “anaemic” for homebuyers and homeowners.

In reality, Ms Bakos said this was more likely being caused by tenant households increasing in size with more people living under one roof, effectively limiting the number of people seeking homes and slowing rent growth.

However, with Australian Housing and Urban Research Institute data indicating the nation needed 1.1 million more social homes to be built by 2037, she said they “still needed something in this budget” for renters and social housing.

“They have a lot of playing catch up to do getting on top of this,” Ms Bakos said.

“So this is a missed opportunity.”

Ms Bakos said while no further announcements around taxes or reforms for investment property owners would be welcome after significant changes in recent years, “I don’t think they could go any harder on them”.

She said the only real positive would have been repealing land tax changes brought in at the start of 2024 that were announced in the 2023 budget.

The arrival of the increased land tax costs has coincided with a more than 20,000 reduction in rental bonds active in Victoria.

Landlord Jian Cheng has sold Victorian investment properties in response to huge land tax bills. Picture: Mark Stewart.

“They have gone way too hard in that space, in my view,” Ms Bakos said.

“Right now, we need investors and they have done everything they can to turn them the other way.”

Housing Industry Association Victorian executive director Keith Ryan described it as “another disappointing budget” that had not addressed key issues with shortfalls in trades needed for a housing construction boom.

“We weren’t expecting the government budget to do much to help the home building industry,” Ms Ryan said.

While he noted that the extension to the off-the-plan stamp duty concessions was “not a bad thing”, it wasn’t likely to make a large difference.

“I was expecting another disappointing budget, and last year was relatively light on, too,” Mr Ryan said.

He added that the bigger issue was finding the trades to build the homes, and while the previous budget had given them hope they had understood the impact the state’s big build was having on home building — he was now less convinced.

Despite an extension to a program supporting off-the-plan apartment and unit complexes, building industry figures say the bigger issue will be limited workforce. Picture: David Geraghty.

“The only thing we got last year was an assertion that they understood the importance of the big build and not having too much money spent on that, and I’m not sure how that has worked out,” Mr Ryan said.

“You can have more demand, but you also need the equation of supply, and we have a lot of concerns about meeting that demand.

“The only thing to celebrate today is the Reserve Bank’s decision.”

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Liz Upcroft, 28, and James Martin, 28, are preparing to buy their first home later this year but are fearful of what impact the rate cuts could have on prices.

It will seem like a big win for some — but the RBA’s latest interest rate cut could make life substantially harder for a big subset of the Aussie population.

Experts said those still searching for a place to call home would be steamrolled by the central bank’s decision to slash interest rates by 0.25 per cent, announced at its May board meeting on Tuesday.

The official cash rate has now dropped from 4.1 per cent to 3.85 per cent.

The move, widely anticipated by economists and the money market, is the second rate cut for the cycle following an earlier reduction in February and a hold in April.

It will deliver existing homeowners a lot of savings on their repayments but it is also expected to supercharge the property market and leave would-be buyers even further behind.

The cut could pour fuel over an already heating housing market and drive up prices, with much of the increased competition expected to come from investors and upgraders, economists revealed.

All this will coincide with a still frantic rental market that will make it harder for new home buyers to save fast enough to match price rises.

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RBA Governor Michele Bullock has been under pressure to announce a cut. Picture: NewsWire / Nikki Short

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Gareth Croy, director of financial services firm Your Future Strategy, said first-home buyers are going to be “chasing the market”.

“Another cut, plus more cuts later this year, could boost the average buyers’ borrowing capacity by about $75,000. And we could see that amount added to prices by Christmas,” he said. “Rate cuts do create this fear of missing out that can push prices up.”

PRD chief economist Dr Diaswati Mardiasmo said the recent cut and subsequent cuts would make it harder for aspiring first-time buyers to get into the market in the coming months.

“First-home buyers who are ready to purchase right now might get some benefit from cheaper rates but those with longer-term plans are going to find it a lot harder,” she said.

“Part of the problem is that someone who isn’t in the market yet will see their ability to save diminish because there is still high rent and high living costs and three or more cuts this year will push up the price they will pay for their home.”

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The big four banks had all predicted a rate cut this month. Picture: NCA Newswire

The brutal twist is that those trying to save for a deposit could be hit twice.

New research has found that the majority of Aussies are still banking with the same institution they joined as teenagers — often on outdated savings accounts with lacklustre interest returns.

Banks have also historically been very quick to slash interest rates on savings accounts.

With rates now slashed even lower, their hard-earned deposits are soon to be earning a lot less.

KEY BANKING MISTAKE EXPOSED

The polling by comparison group Finder.com.au revealed 51 per cent of Aussies were sticking with the bank they joined as children, often in accounts set up by their parents.

The research found 55 per cent of women were still with the same bank they had as a child, compared to 47 per cent of men. The trend was prevalent across all generations, with almost one in three baby boomers (30 per cent) still with their very first bank.

Finder personal finance expert Sarah Megginson said these Aussies were likely missing out on a better deal.

“You can be sure there’s a better rate available than the one on the account your parents opened for you as a child,” she said.

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Rate cuts have historically encouraged higher bidding at auction. Picture: Jeremy Piper

“You might think your existing bank is “good enough”, but if you’re not earning interest, it’s your bank balance that is missing out.”

It comes as additional modelling from Aussie Home Loans found that rising prices would likely outweigh the benefit of lower interest for first-time buyers.

Those who bought next year could be stung with an additional $77,000 in costs over the life of their loans, the Aussie analysis found.

RISING ANXIETY AMONG FIRST-HOME BUYERS

Some first-home buyers say they are fearful of what the future holds.

James Martin and Liz Upcroft, both 28, plan to buy a home later this year or early next and said they were concerned price rises could be too fast.

“Rate cuts are fantastic for people who already bought but for someone looking to buy at the end of this year, it’s a bit of a worry because prices could go up a lot. It’s a catch-22,” Mr Martin said.

He added that the prospect of getting priced out the market had encouraged them to consider the government’s First Home Guarantee Scheme, which will allow them to buy with only a 5 per cent deposit.

Liz Upcroft, 28, and James Martin, 28, are preparing to buy their first home later this year.

“I feel like if we wanted to get a 20 per cent deposit, the interest rate cuts would affect our savings and it would be a lot more of a problem,” Mr Martin said.

IMPACT OF PREVIOUS CUTS

Mortgage Choice inner west broker Chantelle Rangel said similar cuts in interest rates had heated the housing market in the past and this trend was already looking to be repeated.

“I’ve never been this busy before,” she said. “What’s interesting is, we’ve had a significant increase in investor pre-approvals as well as people wanting to purchase in their self-managed super funds.

“There is always a frenzy of demand as soon as rates drop … We experienced many buyers who were sitting on the sidelines due to affordability re-enter the market after the last rate cut.”

REA Group economist Anne Flaherty said a similar trend even occurred when rates were last cut in February.

Realestate.com.au economist Anne Flaherty said the February rate cut drove up prices.

“Following February’s rate cut, buy searches on realestate.com.au jumped, consumer sentiment saw a significant recovery, and home price growth picked up,” she said. “A rate cut in May is likely to have a similarly positive impact on buyer demand and confidence.”

Peter Kelaher, director of buyer’s agency PK Property, said in a note to clients that the experience of previous rate cuts suggested a wave of demand was coming.

“When interest rates come down, the natural human reaction in most cases will be to borrow as much money as you can,” he said.

“And what does that mean? It means one thing: people can throw around more money to be competitive at auction, and in general, the property market.”

Owl Home Loans director Aidan Hartley said rate cuts had already driven a huge influx of buyers seeking approvals.

Rate cuts are being matched with an environment where not enough new houses are getting built.

“I’ve been doing this a while and I’ve never been thrown as many contracts from new buyers,” he said. “There’s a big sense of urgency because a lot want to get in (to the market) before cuts because they’re taking out variable rates,” he added.

Compare the Market property expert Andrew Winter said a rate drop at the RBA’s Tuesday meeting would likely push prices up again.

He explained that cheaper credit would lead to bigger offers on properties, particularly in highly sought after areas.

Mr Winter said aspiring buyers may be anxious to “get a foot in the door” now before market conditions become too competitive. He said the capacity to borrow more money would not make buying a house easier for most people.

“The main hurdle for most first-time buyers is raising a deposit which can be extremely challenging when value growth outpaces wage growth in such an extreme way.”

The post Latest interest rate cut will be big blow for one key Aussie group appeared first on realestate.com.au.