Interest rate cuts and market momentum: what’s driving confidence in mid-2025

It’s been another tumultuous month with international events dominating news headlines once again. These developments in distant lands inevitably filter through to Australian consumers, dampening confidence at a time when economic stability remains paramount.

Such international disruptions are likely weighing heavily on the Reserve Bank’s considerations ahead of their next meeting. Many economists are anticipating another rate cut to provide additional economic stimulus, and we believe the RBA may indeed choose to act decisively to help bolster Australia’s economy during this challenging period. Current market expectations suggest the cash rate could fall by another 25 basis points. One of the big four banks just announced the possibility of a 0.5 per cent drop in July. Any downward shift will deliver further relief to mortgage holders and increase borrowing power for anyone looking to invest. This is positive news for property owners across major population centres.

What remains clear is that Australian property continues to be viewed as a safe-haven asset during periods of uncertainty. Well-chosen real estate has consistently demonstrated its ability to ride out short-term market volatility and deliver excellent long-term benefits to those who secure quality assets with strong fundamentals.

This month, we’ve revisited a perennial theme among our offices, examining where buyers could invest $750,000 in either a home or investment property. This exercise always proves popular as it not only illustrates the diverse buying options across Australia’s vast geography but also reveals how the purchasing power of that figure has evolved compared to previous years.

What’s particularly compelling about this month’s analysis is that regardless of service area, viable opportunities exist for buyers across all population centres at the $750,000 level. In some instances, this budget will secure more than one asset, while in premium locations, it affords access to quality properties with solid growth fundamentals. The key, as always, lies in selecting real estate with the right underlying drivers to ensure long-term returns meet expectations.

In our commercial section this month, our teams examine the office sector, focusing on new construction and refurbishment activity across major markets. It’s fascinating to observe how the evolution of work patterns — particularly the widespread adoption of hybrid working arrangements — is directly informing how developers approach new and refurbished office space. This shift represents a fundamental change in how commercial real estate is conceptualised and delivered.

Finally, our rural specialists provide an excellent analysis of Australia’s emerging carbon market and its growing influence on rural property activity. Two of our most experienced directors deliver a comprehensive perspective on this rapidly evolving sector, which represents a significant new revenue stream for landholders.

These insights from our teams underscore the importance of accessing professional, independent guidance when navigating today’s complex property landscape. In an environment where global events can create both challenges and opportunities, relying on experienced local operators becomes increasingly critical for making informed real estate decisions — expertise that Herron Todd White continues to deliver across Australia.

Gary Brinkworth
CEO