Homebuyers appear to be on the move again after the February interest-rate cut, as national home prices climbed higher in March.
National home prices rose 0.27% to $799,000 in March, up by 3.91% compared with a year ago, according to the latest PropTrack Home Price Index.
Economists say the February interest-rate cut has boosted buyer demand, however some real estate agents contend that the cut has done little to move the dial for buyers just yet.
The capital city markets led the monthly gains, with prices rising by 0.31%, while regional markets saw a 0.18% increase.
Canberra came out on top, recording 0.54% of month-on-month home-price growth, followed by Sydney where prices rose by 0.47%.
Brisbane, Adelaide and Perth saw more modest monthly increases but have remained the top annual performers, with year-on-year values up 9.39%, 11.32%, and 11.53%, respectively.
Melbourne and regional Victoria posted positive monthly home-price gains in March, but were still recording negative annual price changes.
Poor affordability and a surge in more homes for sale throughout spring tempered price growth in the capitals in 2024, but REA Group senior economist Eleanor Creagh said February’s rate cut had reignited buyer demand and price growth.
“Home prices across the country climbed in March, following a clear shift in market momentum triggered by the Reserve Bank’s February rate cut,” Ms Creagh said.
“February’s rate cut boosted borrowing capacities and buyer confidence, helping to reignite demand and reverse the small price declines seen in the months prior.
“Market sentiment has improved and buyers who had delayed purchasing decisions due to the sustained higher interest-rate environment are likely re-entering the market.”
Not everyone agrees though, with some real estate agents reporting the February interest-rate cut had little impact on buyers in their markets.
Sydney-based real estate agent and CobdenHayson Balmain director Matthew Hayson said the recent interest-rate cut appeared to have had a bigger impact on sellers than buyers.
“It actually encouraged more sellers to bring their homes onto the market, hoping that buyer confidence should return,” Mr Hayson said.
However, buyers in Sydney continue to take their time on their purchasing decisions, he said.
National home prices rose 0.27% to $799,000 in March, up by 3.91% year-on-year. Picture: Getty
“The market has been pretty flat in Sydney, it's still more in favour of buyers,” he said.
“All of the data is reflective of a buyer's market where buyers have choice, so vendors have to be very sharp on their pricing in order to encourage interaction.
“Every agent that I talk to is battling their way through at the moment, it's a real arm wrestle trying to get a deal done between buyers and sellers.”
In Brisbane, real estate agent and REMAX Results Morningside principal Hayley Van de Ven said the Brisbane property market remained quite strong.
“Stock levels are still pretty tight across the board, and that's definitely kept those prices buoyant,” she said.
“Brisbane has come of age, it used to be the poor little sister, and now it has become a really attractive city.
Experts are divided about the impact of the latest interest rate cut on homebuyers. Picture: Supplied
“It remains an incredible place for people to invest in, and we're still seeing a lot of interstate migration as well.”
Ms Van de Ven said it was unlikely that the recent interest-rate cut had had much impact on Brisbane buyers.
“I don't think $50 a month is going to move the needle when we're talking about $1 million homes,” she said.
While the jury may be out on the impact of the latest interest-rate decision, Ms Creagh said there were other structural factors also supporting home-price growth nationally.
“Population growth remains strong – though it is beginning to moderate – and Australia continues to face a significant shortage in new home completions,” Ms Creagh said.
“However, stretched affordability remains a major challenge and will only improve gradually, given the modest and measured rate reductions expected ahead.
“We expect prices to keep lifting over the coming months, but the rate of growth is likely to be more modest compared to recent years.
“With affordability still a major constraint, the impact of further rate cuts will be somewhat tempered.”
Looking at the month ahead, Mr Hayson warned that April would be a disruptive month for buyers and sellers.
“Over the coming weeks, we've got school holidays, the Easter long weekend, Anzac Day, and the federal election in early May, so it’s a very disrupted April,” he said.
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