In a significant move, the Reserve Bank of Australia (RBA) reduced the official cash rate to 3.85% in June 2025 — the first cut in five years. This policy shift comes at a time when housing affordability and borrowing power are top concerns for Australians, particularly first home buyers and property investors.
So, how does this help?
For First Home Buyers
Lower interest rates mean reduced borrowing costs, which can slightly increase borrowing capacity and make home loan repayments more manageable. While this doesn’t solve the deeper issues of high property prices or tight supply, it does ease the immediate financial pressure, making the property journey a little more accessible for young couples with kids or anyone trying to enter the market for the first time.
For Property Investors
A cut in interest rates improves the investment equation by reducing the cost of holding a mortgage, potentially leading to better net rental yields. This can be particularly appealing to seasoned investors looking for a property to grow their portfolio or those considering investment options for a better future.
Source : https://www.reuters.com/world/asia-pacific/australian-consumers-give-muted-cheer-lower-interest-rates-2025-06-10/
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