With the Reserve Bank’s two interest rate cuts now in the rear-view mirror, property prices across Australia are firmly on the rise.
February and May’s reductions have improved borrowing conditions, reigniting buyer demand and boosting confidence in the housing market.
Expectations of further rate cuts are fuelling this momentum, with affordability improving and competition intensifying—especially in major cities and high-demand regional areas.
The RBA opted for a measured 25-basis-point cut in May, lowering the cash rate to 3.85% passing on a steeper 50-bp reduction.
Markets now anticipate rates could fall to around 2.8% by December 2025 — 1.5% below current levels.
Analysts forecast capital city dwelling prices may climb 6% to 10% by late 2025 or early 2026, though this outlook remains sensitive to economic shifts.
The RBA’s May meeting minutes, released today, confirm its cautious stance, citing domestic inflation, labour market data, and global trade tensions.
Inflation has eased into the RBA’s 2–3% target, but household debt and extra mortgage repayments remain elevated.
While housing credit remains steady, business credit is growing at a faster rate than investment credit.
The board emphasised predictability amid global uncertainty and signalled readiness to act decisively if conditions deteriorate.
The next policy meeting is on 7–8 July.
Across the Atlantic on Wall Street, the three major US indexes opened June on a positive note, shrugging off early-session pressure from renewed global trade tensions.
Concerns resurfaced after China accused the US of breaching last month’s agreement, citing new measures that “seriously undermine” the deal.
The accusation followed President Trump’s claim that China had “totally violated” the tariff pact.
At the close in New York, the Dow Jones Industrial Average rose 35 points, or 0.08%, to 42,305.48.
The S&P 500, a key global benchmark, added 24 points, or 0.41%, to 5,935, while the tech-rich Nasdaq Composite climbed 128 points, or 0.67%, to 19,242.61.
The US Dollar Index (US DXY) drops to 98.75—its lowest since April—as the “Sell America” trade gains momentum.
Turning to the “Magnificent Seven,” major tech stocks ended mostly higher on Monday.
Meta Platforms surged 3.6% following reports that it plans to roll out an AI-powered advertising service by the end of next year.
Nvidia rose 1.7%, while Microsoft, Apple, and Amazon posted modest gains.
In contrast, Alphabet and Tesla fell by over 1%.
In bonds, crypto and commodities
The 10-year Treasury yield, which influences mortgage rates and other key loans in the US government bond market, settled at 4.42%.
The policy-sensitive two-year yield, which closely tracks expectations for Federal Reserve interest rate adjustments, closed at 3.93%.
Bitcoin, the flagship cryptocurrency, has made a remarkable climb back above the US$100,000 mark, reaching an all-time high of US$111,953 in late May.
As the volatility continued, Bitcoin was trading at US$105,200, rebounding from an earlier low of US$103,700 on Monday.
Ethereum fluctuated between a daily range of US$2,476 and US$2,614 before settling at US$2,606.
Spot gold climbed to US$3,360 per ounce as investors sought refuge in the traditional safe haven amid heightened equity market volatility.
Energy stocks rose as crude oil prices surged following OPEC+’s announcement of a smaller-than-expected production increase.
West Texas Intermediate crude rose to US$62.05 per barrel, while Brent crude finished at US$64.75.
The Eurodollar was 1.1420, and the British pound finished at 1.3534. The Japanese yen ended at 143.00, and the Australian dollar was at 0.6450.