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Australia’s Property Market Surges After Interest Rate Cuts


The Australian property market has made a strong comeback in early 2025, following the Reserve Bank’s decision to cut interest rates in February. This move has reignited buyer confidence and triggered notable price growth across multiple regions, with some areas experiencing standout surges in property values.


Inner Melbourne Leads the Pack


Inner Melbourne, which had been lagging in previous market cycles, is now leading the rebound. House prices in the area have risen by 3.6% since the February rate cut, while unit prices have jumped 5.9%. This makes it the fastest-growing market nationally for both houses and units. After a period of stagnation, Melbourne’s affordability is making it an appealing option once again for buyers.


Top House Price Growth Regions


In addition to Melbourne, several other regions have seen significant house price increases over the past three months:


  • Darwin: 3.29%

  • Gold Coast: 2.97%

  • Barossa – Yorke – Mid North: 2.94%

  • Townsville: 2.83%

  • Mackay – Isaac – Whitsunday: 2.81%

  • Sydney – Inner West: 2.73%

  • Adelaide – West: 2.64%

  • Central Coast: 2.38%

  • Darling Downs – Maranoa: 2.14%


These gains highlight a nationwide trend where lifestyle locations and relatively affordable regional hubs are outperforming traditional capital city markets.


Strong Growth in the Unit Market


The unit market is also showing solid growth momentum, especially in key metropolitan and coastal areas. The top-performing areas for units over the past quarter include:


  • Melbourne – Inner: 5.90%

  • Gold Coast: 2.99%

  • Melbourne – Inner South: 2.96%

  • Melbourne – North West: 2.63%

  • Brisbane – Inner City: 2.49%

  • Perth – South West: 2.48%

  • Sunshine Coast: 2.47%

  • Richmond – Tweed: 2.31%

  • Brisbane – North: 2.26%

  • Townsville: 2.24%


Many buyers are now turning to units as more accessible entry points, particularly in high-demand urban centres.


What’s Driving the Market?


Several key factors are fuelling the current upswing:


  • Interest Rate Cuts: Reduced borrowing costs have made mortgages more affordable, encouraging more buyers into the market.

  • Improved Buyer Confidence: Sentiment has rebounded strongly, especially in regions that had previously slowed down.

  • Affordability in Key Cities: With some cities becoming more accessible price-wise, they are attracting renewed interest from both investors and first-home buyers.


The Road Ahead


While the market appears to be on a strong upward path, experts remain cautiously optimistic. The pace of future growth will depend on a combination of economic factors, including future interest rate movements, housing supply levels, and broader consumer sentiment.


However, one thing is clear: the market is responding rapidly to monetary policy shifts, and momentum is building across many regions that had previously been overlooked.

 
 
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