How Spring Rate Cuts Are Driving Buyer Competition
Spring has sprung with a bang in Australian real estate. After three RBA rate cuts this year (Feb, May and Aug), the cash rate is now 3.60%, handing buyers more borrowing power. For example, even a 0.25% cut can add tens of thousands to a borrower’s budget. At the same time, listings are extremely low. Industry analysis shows new listings nationally are about 18% below the ten-year average, with particularly tight stock in several capitals. Capital-city stock is still extremely tight. According to recent market data, listings are down across most major cities: Perth is down 24%, Brisbane 11%, Hobart 13%, Adelaide 3%, and nationally stock is 3% lower than last year. By contrast, Sydney has seen a small rise of +6% YoY, and Melbourne is up +2% YoY. Even with these small increases, supply remains well below what buyers need — meaning more competition and upward pressure on prices. In practice, this means far more buyers chasing very few homes, pushing prices up.
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Sellers in Queensland, Western Australia and Tasmania (and Darwin) are feeling the squeeze most acutely. In Adelaide, for example, price growth has attracted investors – lending for investment homes is up 16% over last year, so investors now make 39% of all home loans in SA. Similarly, in Queensland, PropTrack reports investors account for about 38% of new loans. In short, competition is fierce across the country, especially where stock is low.
Rate Cuts & First-Home Buyers
Three RBA rate cuts in 2025 have lifted borrower budgets. Domain’s analysis shows a 25bp cut can boost a double-income family’s borrowing power by up to $49,000, while a Mortgage Choice study found an $18,000 jump for an average household from just one quarter-point cut. Lower rates plus rising house prices mean first-home buyers are moving fast. On 1 October 2025 the federal government expanded the 5% deposit Home Buyer Guarantee: all first-home buyers can now buy with a 5% deposit, unlimited places, no income caps, and higher price caps. About 70,000 additional Australians became eligible under this change. More first-home buyers and upgraders mean even higher demand, as LJ Hooker noted – first-timers “who previously sat on the sidelines now have greater access”. In practice, the 5% scheme is boosting entry-level activity and adding to spring competition.
Strategy: Negotiation & Timing
In a tight market, buyers need more than price to win. Flexible terms can seal the deal. For example, offering a settlement date that suits the seller (or releasing more deposit early) can be appealing. One expert advises adjusting your settlement timeframe to fit the vendor’s needs – even moving the deposit release or extending settlement so the seller can buy their next home.
Timing is also a factor. Brokers see a mini-rush of listings in mid-to-late December, as sellers try to cash in before the holidays. The best buying window can be around mid-December to just before Christmas, when some homes pop up, but buyer activity may be slightly down. After Christmas, supply often remains very tight – LJ Hooker warns sellers “holding off” risk competing with many new listings in January. In practice, motivated buyers might make offers over that Dec.13–25 period, while sellers listing in early January will enjoy limited competition (though buyers should move quickly once stock appears).
At the end of the day, the spring market rewards the prepared. Pre-approval, realistic budgeting, and a good broker will help you navigate bidding wars. And once your loan is sorted, remember to use all negotiation levers (clear finance, deposit size, settlement terms) to stand out.
At ASK Financials, we make the loan process simple and guide you every step of the way. Speak with our brokers today to understand your new borrowing power and get your pre-approval ready for spring. Book your free strategy session on our website or call us on 0433 944 055. We’ll help turn your property goals into reality with clear advice and personalised support every step of the way.
