Unlocking Opportunities: How Interest Rate Cuts Will Open Doors for Victorian Homebuyers

Aerial view of Eynesbury

Australia’s property market has received a much-needed boost with the Reserve Bank announcing the first interest rate cut since 2020. For first-home buyers and mum-and-dad investors alike, lower rates could open the door to long-awaited opportunities, easing borrowing pressures and making homeownership more attainable.

While housing affordability challenges remain, this announcement signals a step in the right direction, according to Resimax Group’s Founding Director and CEO, Ozzie Kheir. Since predicting interest rate cuts at the end of 2024, Ozzie has highlighted their potential to reinvigorate buyer confidence and drive market momentum.

Resimax Group’s Founding Director and CEO, Ozzie Kheir

What changes did the Reserve Bank of Australia make to interest rates?

Taking effect during March, the Reserve Bank of Australia’s interest rate cuts will be reflected in the lending rates of major banks, gradually lowering mortgage repayments and improving borrowing capacity.   The announcement will see the cash rate decreased by 0.25 of a percentage point to 4.1 per cent.

How will the announcement impact borrowing power?

Lower interest rates will allow for increased borrowing capacity, with home buyers and investors set to access up to $13,000 more in lending power as a result of the announcement.

For first-home buyers, this boost comes alongside additional government incentives such as the $10,000 First Home Owner Grant and the Victorian Homebuyer Fund. Purchasers can also take advantage of private developer incentives, such as Resimax Group’s , ‘Leap Year’ rebate. The Australian-first initiative gives eligible renters the opportunity to rebate twelve months of rent off the purchase price of a new home in one of Resimax Group’s estates.

These factors combined will fast-track entry into the property market, while increasing purchasing equity to  make homeownership more attainable for Australians.

What will be the impact on the Australian property market?

As interest rates begin to decrease, the question on everyone’s mind is how this will reshape the landscape of the Australian property market. With ongoing economic challenges, there could be significant implications for buyers and investors alike.

“The RBA’s decision signals the start of a rate-cutting cycle. Many are doing it tough at the moment, and hopefully, this rate cut will ease the cost-of-living pressures and build some confidence around the economic outlook,” said Ozzie.

Will the rate cut improve wider housing affordability?

While interest rate cuts will increase borrowing capacity, they won’t necessarily improve ongoing housing affordability issues, according to Ozzie.

“The announcement will obviously help market conditions, however, one rate cut won’t significantly move the needle. Since May 2022, we have had 13 consecutive rate rises and everyone has felt the pinch of this. The recent rate cut will restore confidence that the RBA is unlikely to raise interest rates in the short term and hopefully follow up with some further cuts in 2025.

“Suburbs with accessible price points, such as Eynesbury and Wallan, remain within reach for buyers facing affordability pressures. Given their proximity to new infrastructure within Victoria’s western and northern growth corridor, they are also experiencing exponential growth in value,” he said.

Additionally, Ozzie says investors or owner-occupiers should consider properties on smaller block sizes and townhouses to build their housing portfolio as a solution.

“There has been a push toward townhouses and smaller detached lots under 300sqm as this is all that most people can afford.  We have looked at the feasibility of townhouses and apartments on a similar footprint, but our focus on compact detached housing will deliver something of longer-term value and use to purchasers,” he continued.

Artist impression of townhouses at Findon Creek, Wollert

Navigating the market with confidence

In Australia’s ever-shifting property landscape, making informed decisions is key. Resimax Group provides end-to-end property solutions, combining expert market insights, exclusive development opportunities, and financial education services to help buyers and investors navigate the Victorian property market with confidence.

Whether you’re looking to enter the market or expand your portfolio with strategic investment opportunities, our team is here to guide you every step of the way. Get in touch with us today to learn more.