Brokers urged to be 'front-footed' regardless of RBA's decision
The Reserve Bank of Australia (RBA) is gearing up for a high-stakes cash rate call on Tuesday, 8 July, amid a new record high for Australian house prices.
National housing values rose by 0.4% in June, according to PropTrack, marking the sixth straight month of gains and signalling renewed momentum across the country’s housing market.
The resurgence comes as interest rates have moved lower throughout 2025, strengthening price growth and extending gains to every capital city.
Adelaide continued to outperform in June, registering the strongest monthly rise at 0.6%, while Brisbane and Perth, last year’s frontrunners, posted gains of 0.3% each.
Home prices have risen sharply in recent years, outpacing household income growth and pushing more buyers toward lower- and mid-priced markets.
But the expectation of further interest rate cuts will likely continue to support housing demand and reinforce these record price gains.
Consensus leading up to Tuesday’s rate call is clear among the banking giants, with Commonwealth Bank, NAB, ANZ and Westpac all predicting 25 basis points worth of cuts.
ANZ was the last to fall in line with consensus, having previously anticipated a hold. It was an expected change of heart for the major, given recent weaker-than-expected retail sales data, stalled consumer confidence, and growing global uncertainty, particularly around US trade policy.
What do brokers want from the RBA?
Morgan Owen (pictured, below), founder and director of Victoria-based brokerage Penny Finance, simply wants some clarity over the RBA’s direction. “If multiple hikes are on the horizon, say so. If a cut is on the table, signal it. The uncertainty is more damaging than the movement itself,” she said.
Owen believes policymakers should shift their focus from the headline inflation figure “to what’s happening in the real economy”.
“When you strip out government spending, we’re already in a recession,” said Owen. "Adjusting the cash rate to respond to supply-side price shocks doesn’t make sense – higher rates won’t fix a lettuce shortage.
“It’s time to rethink how we use the cash rate as a tool. It’s a blunt instrument and doesn’t hit all Australians equally. A stable, more predictable rate environment would give people the confidence to plan ahead.”
Melbourne-based Loan Market broker Jacob Decru has seen sentiment change for the better over the past two quarters, and talk of more rate cuts on the way is only piling more FOMO (fear of missing out) in the housing market.
Decru said: “Owner-occupiers in Melbourne feel the market has bottomed out and further interest rate cuts are going to lift prices. There are more buyers wanting to purchase now, but fewer properties on the market compared to last year.”
Meanwhile in South Australia, Mortgage Choice franchise owner Belinda Sugars (pictured top, left) has her fingers crossed for a 0.25% cut on Tuesday. “Oh how welcome a rate drop would be… Winter has hit hard in SA and heating bills have gone up so any RBA relief will be very welcome,” said Sugars.
All of Sugars’ clients, from first-home buyers to existing property owners, are similarly gunning for a rate cut. “The drop would also give hopeful buyers more wiggle room on their borrowing power,” she added.
Non-bank lender Aquamore Finance’s head of distribution Matthew Porch (pictured top, middle) reckons “the case is stronger than even for a reduction”, given that inflation is within range and house prices have stabilised.
Porch suggested that the banks have already priced in a rate cut. “Obviously, not all RBA reductions are passed on immediately or in full, but the banks appear to be coming to the party,” he said.
Mortgage aggregators weigh in
In anticipation for Tuesday’s interest rate call, Mark Hewitt (pictured top, right), general manager industry and partnerships at mortgage aggregator AFG, said that while the RBA may be “keen to cut rates to help stimulate growth, they will be carefully weighing the risk of overheating an already strong housing market”.
If the expected cut goes ahead, “it is likely to further reduce borrowing costs, increasing affordability, and unlocking more demand. So for mortgage holders, the cut will provide welcome relief but for buyers trying to enter the market, it could push house prices higher”, added Hewitt.
Loan Market chief executive David McQueen (pictured, below) emphasised the immediate impact of rate cuts on buyer behaviour.
"The cash rate has dropped .5 percentage points in the last five months, which has been the news people trying to upgrade or enter the market have been waiting for,” said McQueen. He noted that Loan Market has reported a 53% year-on-year increase in pre-approval numbers following the two year-to-date interest rate cuts.
Meanwhile, Blake Buchanan, general manager at Specialist Finance Group, advocated for a larger 0.35% cut to the cash rate, stating: “The earlier reductions have not really been felt as any savings has been taken away by inflated travel, energy, insurance and grocery costs.”
What happens next?
While the broad consensus is of a 25-basis-point on Tuesday, the forecast for the rest of 2025 is less certain.
The banking majors – ANZ, NAB, Westpac and Commonwealth Bank – have differing predictions on the pacing of the cuts, though their end-of-year forecasts generally fall in the 3.1% and 3.35% ballpark.
Westpac has emerged as the most dovish of the Big Four, with the bank’s economists expecting the cash rate to bottom out at 2.85%; though the timing is all dependent on the RBA’s post-meeting tone.
In the non-major banking space, Bendigo Bank’s chief economist David Robertson, who said the RBA appears “very likely” to cut rates next week to 3.6%, reckons another cut may not happen until November.
He said: “One of the reasons we probably won’t go below a neutral cash rate of around 3.1%, is resilient labour markets, with unemployment at 4.1% still much lower today than pre-pandemic back in 2019, and its average rate through that decade of 5.5%, and similarly record lows for underemployment.”
While lower interest rates will only be a good thing for mortgage holders and their brokers, broking industry stalwart Nick Young of Trail Homes stressed the importance of addressing the structural problems in Australia’s economy.
In Young’s opinion, productivity and tax reform should be high on the political agenda going forward. He drew particular attention to the importance of getting migration policy right.
High migration numbers, said Young, have been a huge driver of the Australian economy; so much so, that the country quite possibly would have tipped into a recession without these high numbers.
But “continually having such high migration is not sustainable long term”, warned Young. “In the medium term, it drives housing prices, which is good for brokers, but long term, it does not end well.”
Regardless of what the RBA decides to do on Tuesday, Mark Haron, executive director and mortgage aggregator Connective, has one piece of advice: “Brokers should be front-footed.”
“Borrowers will still be watching the market closely and as we have seen, there has been a significant increase in applications especially pre-approvals as borrowers anticipate a lower interest rate environment,” said Haron. “This is a key opportunity for brokers to proactively engage their clients and ensure they can secure the best possible outcomes in a shifting rate environment.”
