The 2025 federal election has concluded—the federal Labour government has been re-elected, bringing stability but still calling into question property prices, interest rates, and home loans in the near term. While many of the policies of the labour government will remain, pricing, supply, and the growing competition being faced by buyers still pose challenges in the housing market.
FHB Support: Pros and Cons
The Labour Government intends to continue its programmes to help first home buyers, and these include low-deposit loans and shared equity schemes to assist first home buyers who might otherwise find it difficult to save large deposits. However, these programmes add more buyers into the market, and since demand is rising quicker than the number of homes on sale, price increases result, further squeezing affordable homes from the view of first-time buyers.
Inflation Has Entered Target Range: What Does This Imply for Interest Rate Movements?
Finally, inflation has fallen into the target range set by the Reserve Bank of Australia. Core inflation is now reported to be 2.9% in the country, headline inflation at 2.4%, and services inflation from 4.3% down to 3.7%.
Such is the inflationary economy in Australia. This would be good news, but, in the words of the RBA, "Interest rate cuts might be too soon for now. We would like to see inflation hold on the lower side for an extended period." That said, most of the major banks predict interest rates will be cut in the second half of 2025 if the trend continues.
Rents Update: Rents Could Be Going Up Soon Again
In April, rent prices eased a little, mainly due to the joint effect of school holidays and Easter. However, it is a temporary lull. Rental vacancy rates remain rock bottom, with rental demand forecast to rise again soon. The coming influx may push the rents even higher, specifically in areas where there is a lack of housing.
Auction Markets: Demand Still Strong Despite Fewer Properties
Strong demand and rising clearance rates are still being witnessed in the auctions, even though there is a dearth of homes available for sale in cities such as Sydney and Melbourne. This means that many buyers are still out in the field searching for homes, with few willing to compete for properties. Many buyers are hoping that prices go down even further before they buy or are concerned prices will keep steadily moving up.
The 2025 election brought stability for some time, but the property and home loan market remains in flux. With inflation dipping and with expectations of interest rates being cut later on this year, it is an ideal time for assessing your finances closely. Whether it is first-home buying, refinancing, or investment in property, having the right advice at the right time can save you many headaches and lead to wise decisions. The months ahead may open up a few windows of opportunity, and if you are ready for them, you just may get the jump on them.
For more analysis, Call OM FINANCIALS. Let our expert mortgage brokers guide you through enabling you to choose wisely in the shifting economic landscape. Reach out to OM Financial Services at 0478 876 967 to discuss your options to Maximise Your Savings.
