Election certainty and interest rate cuts set the tone for property

Since our last edition of our monthly report, we’ve witnessed an extraordinary result in the federal election which saw the sitting government secure 94 seats in the House of Representatives, the most in the party’s history. How this decisive mandate will manifest in terms of property policy will take time to be seen. What I can say is that many have speculated that this outcome reflects a desire by the electorate for continuity during a tumultuous time.

In addition, another 25-basis point cut by the RBA this month reduced the cash rate to 3.85 per cent. This has borrowers increasingly confident about the lending landscape. Over 80 lenders have announced cuts to their variable rate home loans in response, including all of Australia’s largest banks. Rate cuts translate directly into increased borrowing power for new buyers and cashflow relief for households with existing mortgages. Both dynamics play to the property market’s advantage. This momentum will only magnify if further predicted cuts – with major banks expecting the cash rate to fall to 3.35 per cent by year’s end – eventuate.

The confluence of political continuity and easing monetary conditions creates a particularly favourable environment for property investment. Unlike previous election cycles where uncertainty dampened activity, this decisive result removes a key headwind for markets.

Given this backdrop, our residential teams have examined market conditions and, specifically, what median property prices actually purchase within their service areas. It’s an opportunity to illustrate in tangible terms exactly how strong buyers’ purchasing power remains across different markets. It’s also an excellent way to demonstrate the relative value proposition between various locations throughout Australia.

While market performance can be disparate, what’s apparent from this month’s submissions is that opportunities exist to secure quality property across most locations at or around an area’s median price. This should further embolden buyers to research what’s available and commit to strategic purchases with the assistance of experienced, independent advisors.

Our commercial section this month focuses on new construction and refurbishment activity in the retail sector. These submissions further highlight the sector’s return to more favourable trading conditions after years of poor performance driven largely by the structural shift from brick-and-mortar outlets toward online commerce. We are now in a space where equilibrium is being established, and retail property is regaining its commercial footing. This transformation bodes exceptionally well for those who invest strategically in the sector.

Finally, our rural teams have analysed Australia’s cotton industry, where water availability and land scarcity remain influential drivers of property values. These fundamental supply constraints are creating compelling investment dynamics for those who understand the market’s complexities.

These insights from our specialists underscore the critical importance of professional guidance in navigating market nuances. In an environment where opportunities abound but require sophisticated analysis, relying on anything less than expert local knowledge could prove costly. Strategic property investment demands both macro-economic understanding and granular market intelligence — a combination our team at Herron Todd White continues to deliver.