The Gold Coast Just Did the Unthinkable: It’s Now More Expensive Than Sydney

Interest rates have been making headlines throughout 2024. The Reserve Bank has delivered three rate cuts this year, with the cash rate now sitting at 3.60%. These cuts are having a real impact on Australian borrowers.

Each rate cut directly increases your borrowing capacity. When rates drop, lenders can approve larger loan amounts because your repayments become more affordable. This gives buyers more purchasing power in the property market.

Markets are pricing in a possible fourth rate cut in November. If this happens, borrowing capacity could increase even further. This would provide additional support for both first home buyers and investors.

The impact on property prices has been significant. Sydney’s median house price jumped 3.4% in the September quarter alone, adding $58,148 to reach $1.75 million. Brisbane, Adelaide, and Perth also reached record highs.

Lower rates are encouraging more Australians to enter the property market. Auction clearance rates are at their highest levels in over two years. Consumer confidence is rising as people feel more comfortable taking on mortgage debt.

The Australian Government’s 5% Home Guarantee is amplifying this effect. This scheme allows eligible first home buyers to purchase with just a 5% deposit. Combined with lower rates, this is opening doors for many young Australians.

Refinancing has become increasingly attractive with falling rates. Homeowners are reviewing their existing loans to see if they can secure better terms. This could save thousands of dollars annually on mortgage repayments.

Investment lending is reaching record levels, particularly in Queensland. Lower interest rates improve the cash flow of investment properties. This makes property investment more viable for everyday Australians.

However, increased borrowing capacity is also driving competition. More buyers with larger budgets mean higher property prices. This is why nearly every capital city recorded gains in the September quarter.

If you’re considering buying or refinancing, now is the time to speak with a mortgage broker. They can calculate your exact borrowing capacity and help you take advantage of current market conditions.