A shift in sentiment
The second half of 2025 could present real opportunity
We’re halfway through 2025, and already there’s been a noticeable shift in the market. The Reserve Bank has delivered two rate cuts, inflation is back within target, and employment is holding steady. While global uncertainty continues to hang over the broader outlook, many experts, including those we’ve welcomed into the office recently, are pointing to the same thing: property prices are expected to rise. It’s not a boom, but confidence is slowly returning. Momentum is building, and the second half of the year could present real opportunities, especially for those ready to act. This month we explore what’s driving those forecasts, why the market remains resilient, and what to keep an eye on as we head towards the end of the year.
Two rate cuts in and the market is responding
The RBA’s move to lower the cash rate to 3.85 per cent last month came as no surprise. Inflation is now sitting comfortably within the 2 to 3 per cent band and economic demand is still relatively subdued. Even though the Australian jobs market showed that the unemployment remained strong which would show that perhaps there’s too much steam in the economy, most economists still expect at least one or two more rate cuts this year. Forecasts from major banks support this:
What does this mean for borrowers?
It’s the first real shift in momentum since interest rates started climbing in 2022. Lower rates mean increased borrowing power, reduced loan repayments and a more competitive property market.
Property prices: Climbing but not everywhere
Despite economic headwinds, Australia’s property market is holding its ground. We are truly lucky here in Australia. Ongoing global issues, including conflict in the Middle East have had limited impact locally. Even if oil supplies are disrupted and we see petrol prices rise, many predict property prices to inch upward.
Auction clearance rates in Sydney and Melbourne have hovered around 70 per cent, according to Domain, for the last few weeks.
CoreLogic data shows Sydney house prices are up 1.1 per cent quarter on quarter
What’s keeping the market resilient?
Low stock levels: New listings are rising but still below average
High construction costs: Developers are cautious
Population and Migration growth while slowing, is still elevated, keeping pressure on both rental and owner-occupied markets. The actual figure, according to the Australian Bureau of Statistics, shows Australia’s population growth slowed to 1.65 per cent year on year
Housing shortfall: Despite the Housing Accord’s goal of 240,000 new dwellings per year, because of our migration levels, supply still falls short of the 200,000–300,000 homes needed, according to AMP’s Shane Oliver.
Spotlight: Western Australia
Western Australia (WA) has already seen strong growth in property prices and is like to remain strong, why? Start with strong population growth: WA recorded the fastest annual increase in the country at 2.4 per cent, in 2024.
Add to that, a series of generous first home buyer incentives, including:
Full stamp duty exemption on purchases up to $500,000
Partial relief up to $700,000
And now, there’s more to fuel the speculation for growth, with WA first home buyers soon gaining access to the Federal Home Guarantee Scheme, which allows eligible buyers to purchase their first home, with as little as a 5 per cent and have their lenders mortgage insurance (LMI) waived. Layer all of that on top of falling interest rates, and you’ve got the perfect mix of affordability, demand, and government support. The result? WA property prices could rise significantly over the next 6–12 months — particularly at the entry level, where buyer activity is set to surge.
Coming soon: Expert insights
We’re excited to launch our new video series: The Experts with Black & White Finance. We’ve sat down with the best of the best valuers, lawyers, builders, and commercial property specialists to unpack what’s really happening in the market, beyond the headlines.
These aren’t sales pitches. They’re sharp, practical conversations designed to help you make smarter property decisions, whether you’re buying, selling, refinancing, or developing. Our first episode drops this week. We can’t wait for you to see it.
Final Thoughts
2025 may have started cautiously, but momentum is clearly building. Inflation is easing, rates are softening, property prices are edging up and confidence is returning. Yes, global risks remain from instability in the Middle East to potential trade tensions in the US. But here at home, the outlook is shifting. If you’ve been sitting on the sidelines, now could be the right time to run your numbers and revisit your goals. Whether it’s your first home, your next investment, or simply making sure your current loan still stacks up, we’re here to help.
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