Interest rates are once again front and centre in Australia’s economic conversation, and for good reason. In our latest podcast episode of COAST Chat, our principle buyers agent, Joe Pullos, sat down with James Hasselle—Australia’s largest Mortgage Choice franchise owner with Mortgage Brokers in Miami, Burleigh & Palm Beach—to unpack the latest developments in the lending market, inflation figures, and what the Reserve Bank might do next.
With inflation finally easing back into the target range and the property market responding, it’s an important time for buyers, investors, and homeowners alike to assess their position.
Video interview
Are more interest rate cuts on the horizon?
James believes a rate cut is likely in May, based on recent inflation data that shows both the headline and trimmed mean figures falling within the RBA’s preferred 2 to 3 per cent range. While some media outlets are treating this cut as locked in, James remains cautious, noting that no cut is guaranteed until it happens.
Further into 2025, he predicts another one or two cuts could follow, depending on continued improvements in inflation and consumer sentiment. A dramatic drop in inflation could encourage the Reserve Bank to cut rates again quickly. However, if inflation holds steady, the RBA may pause further cuts to observe market behaviour.
The RBA's measured approach
Under Governor Michelle Bullock, the Reserve Bank has taken a very data-led, conservative approach. James noted Bullock’s use of post-meeting media interviews to guide public expectations and sentiment, a strategic shift in communication that aims to maintain calm and predictability.
While some speculated about a 50 basis point cut following global tariff concerns, James doesn’t see that happening. He pointed out that Australia is now far less dependent on the United States economically, making international trade tensions less likely to trigger extreme domestic rate movements.
Renewed interest from buyers
James observed a noticeable shift in buyer activity during recent inspections. Many prospective buyers who had been sitting on the sidelines appear to be re-entering the market. The reasons are multifaceted: an anticipated rate cut, reduced political uncertainty, and turbulence in the share market.
When traditional investment vehicles feel volatile, Australians often redirect their funds into property, viewed as a safer, more stable store of value.
Gold Coast’s tight rental market
The rental market on the Gold Coast is experiencing significant pressure. With a vacancy rate of just 1.3 per cent, it’s now the most expensive rental market in the country. Rental yields remain high, and suburbs like Southport are experiencing notable capital growth—up 14 per cent over the past year.
This combination of high rents and strong growth is creating a compelling case for investors. As borrowing costs decline, property investment becomes more attractive both in terms of yield and potential capital gain.
Unit 427/1 Aqua Street, Southport – Secured for one of our buyers in 2025
Why it’s a strong environment for investors
For those considering property investment, the current market offers a rare combination of falling interest rates, strong rental returns, and sustained capital growth.
James emphasised that investor lending conditions are likely to improve throughout 2025. Even one or two additional cuts could push rates into the high fours, offering cheaper finance and expanding borrowing capacity.
Importantly, these conditions are unlikely to last forever. As more investors enter the market and demand increases, competition for properties will rise, particularly in areas already experiencing supply shortages.
Should you fix your home loan?
James was clear on one point: now is generally not the time to fix your interest rate. For most borrowers, it makes sense to stay variable and take advantage of further rate reductions, unless personal circumstances demand absolute certainty.
For those facing life changes, such as growing a family or reducing work hours, locking in a fixed rate might offer some peace of mind. Otherwise, staying flexible is the preferred approach in this cycle.
The importance of negotiating with lenders
A major takeaway from the conversation was the importance of negotiating rates with lenders. Not all banks pass on rate cuts equally or immediately. Some, like non-bank lender Athena, acted quickly following the March cut. Others, including major banks, delayed passing on the savings, particularly in commercial lending.
James shared that the best rates on the market are now in the low to mid 5 per cent range, with potential to drop further. However, the headline rate isn’t always the best deal available. Speaking with a broker can often uncover sharper rates and fee reductions that aren’t publicly advertised.
Don’t cross-collateralise your properties
For existing homeowners, now may also be the time to consider upgrading. If your current property has gained value, using that equity to invest in another property or move to a larger home while renting out the current one could be a strategic move.
Given the low vacancy rates and rising rents, even units and townhouses may become solid investments if the numbers stack up.
Final thoughts: the case for property in 2025
As we head deeper into 2025, the outlook for property investment remains strong. The cost of borrowing is falling. Rents and values are rising. And supply remains constrained.
Infrastructure spending, Olympic-led development, high migration, and a historically low vacancy rate are all contributing to upward pressure on property prices, especially on the Gold Coast.
For investors who already hold property, this is an ideal time to assess equity and borrowing capacity. For those looking to enter the market, it could be one of the better environments in years to do so.
Ready to explore your next property move?
Speak to the COAST Buyers Agency team for tailored guidance on your buying strategy and property goals.
