The Perfect Storm - Why Now Is a Prime Moment for Property Investors

Australia is standing at the intersection of major monetary policy easing, resilient housing fundamentals, and political momentum supporting housing affordability. When you combine falling interest rates, supply constraints, and a supportive policy backdrop, the conditions are ripe for strategic property investment.

According to NAB’s latest Monetary Policy Update (April 2025), the Reserve Bank of Australia (RBA) is now forecast to cut rates more aggressively than previously expected. With a cash rate of just 2.6% expected by early 2026, investors are looking at the most accommodative environment we’ve seen in years.

NAB economists expect a 50 basis point cut in May, followed by further 25bps cuts in July, August, November, and February. This is a decisive pivot from the RBA’s prior stance, triggered by falling inflation and growing economic headwinds.

With the real cash rate currently sitting over 1% (a level considered restrictive), the central bank is under pressure to act quickly. The projected easing will shift policy settings from restrictive to neutral — and ultimately into stimulatory territory.

What this means for investors: lower borrowing costs, improved serviceability for loans, and potential capital appreciation as demand increases. History has shown that when interest rates drop, property prices follow upward — particularly in markets with constrained supply.

Despite aggressive rate hikes over 2023–24, Australian property has shown remarkable resilience. Many investors sat on the sidelines, waiting for a clearer outlook — and that clarity is now emerging.

As rates fall, borrowing power will improve, pent-up buyer demand will re-enter the market, yields remain elevated in undersupplied rental markets, and construction pipelines remain restricted, underpinning long-term supply shortages. Investors who act early — before the recovery becomes front-page news — are likely to capture the strongest gains.

NAB’s latest assessment shows that inflation is no longer a constraint on monetary easing. Housing and market services inflation is falling, and global disinflationary forces are taking hold.

Even with a weaker AUD putting pressure on import prices, NAB sees the net impact as deflationary due to weaker demand and global softness. In short, the RBA is no longer boxed in by inflation — giving it room to stimulate growth. For property buyers, this means a lower-rate environment is not just likely — it’s imminent.

Unemployment is projected to tick up to 4.4% before drifting back toward 4.25% by late 2026.

While modest, this increase signals softness in consumer and business confidence. To counter these risks, the RBA is expected to act pre-emptively — which increases the urgency for investors to position ahead of rate cuts.

Adding to this already potent mix is the Federal Labor Party’s proposal to guarantee 5% deposits for first-home buyers and deliver 100,000 new homes nationwide over the next five years. This policy, if enacted, would supercharge demand at the entry level of the market — increasing activity in established housing and stimulating construction. More importantly, it would boost confidence in the housing market, reduce entry barriers for younger and first-time investors, and create spillover demand in mid-tier and growth corridor suburbs.

From trade tensions and tariffs to weakening growth in China, global markets are increasingly volatile. But Australia remains relatively insulated — and the proactive stance of the RBA may make Australian real estate a capital safe haven.

International investors and local buyers alike are likely to seek stability, and Australia’s transparent regulatory environment and strong rental markets make it a prime target.

Whether you’re a seasoned investor or just starting your journey, the moment to act is now.

At Greenrock Advisory, we’re helping clients take advantage of this unique convergence by pinpointing high-performing growth markets, securing properties below replacement cost, structuring purchases for maximum tax efficiency and leverage, and navigating the market with speed, clarity, and insight.

We are entering the perfect storm for property investors — in the best possible sense. Rates are falling. Supply is still tight. Inflation is easing. Policy support is building. Buyer confidence is poised to return.

This is the time to get ahead of the curve.

If you’re ready to expand your portfolio, enter the market, or simply understand your position — reach out to Greenrock Advisory today. Because when the storm clears, those who moved early will be the ones enjoying the sunshine.

Resources
[1] NAB Monetary Policy Update – April 2025
https://www.nab.com.au/business/international/financial-markets/economic-updates

[2] Labor to deliver 5% deposits for all first-home buyers and build 100,000 homes
https://alp.org.au/news/labor-to-deliver-5-deposits-for-all-first-home-buyers-and-build-100-000-homes/