Media Broadcaster Foresees Market Shift
Radio 3AW presenter Tom Elliott has forecast a sharp increase in Australian property prices. His remarks come amid global economic volatility, particularly driven by the US-China trade tensions. Elliott believes that economic uncertainty and monetary policy will drive strong demand for real estate across the country.
Flight to Safety Drives Property Demand
Elliott explained that the recent market instability is prompting investors to shift their focus. “When the share market gets the wobbles… people pull their money out of shares,” he said. Elliott noted that investors typically look for secure assets when markets grow volatile.
He added, “What’s safe? And they go to ‘bricks and mortar’.” This sentiment reflects a broader belief that property remains a stable store of value during economic turbulence.
Interest Rate Cuts to Stimulate Property Boom
Elliott also cited anticipated interest rate cuts by the Reserve Bank of Australia (RBA) as a major factor. “If interest rates go down… that will turbocharge the property market,” he said.
Financial markets expect the RBA to cut rates by 100 basis points this year. Further cuts may follow in 2026. These adjustments could significantly reduce borrowing costs and increase property market activity.
Justin Fabo of Antipodean Macro supports this view. He estimated that a 100-basis-point cut could reduce household interest payments by 1.5% of disposable income. A 200-basis-point cut may ease repayments by 3%.
Figure 1: Australia’s household interest payments
Population Growth Keeps Pressure on Supply
Elliott added that immigration remains high, placing further pressure on housing. “If the population keeps going up… the pressure on the housing market is just immense,” he said.
Australia’s strong immigration levels have long contributed to housing demand. With limited supply, increased population growth can exacerbate housing shortages, particularly in major cities.
March Sees Price Increase Nationwide
Australian home prices rose by 0.4% in March, according to CoreLogic. This lifted the national average price to AUD 820,331 (USD 515,332). The rise followed the RBA’s first interest rate cut in over four years.
Sydney property prices grew by 0.3% in March. Melbourne recorded a larger rise of 0.5%. Every capital city saw increases except Hobart.
CoreLogic’s research director Tim Lawless attributed the shift to improved confidence. “The sentiment boost has positively impacted property values,” he said.
Figure 2: Rise in Australia’s housing prices as seen on March 2025
Recent Recovery Follows Year-Long Decline
Property values had previously fallen for nearly a year. This decline was linked to a sharp rise in interest rates. However, the March recovery suggests that rate cuts and strong demand are restoring buyer activity.
The RBA cut the cash rate to 4.1% earlier this year. Markets now expect three more cuts in 2025, possibly bringing the rate to 3.35% by year’s end.
Borrowing Conditions Remain Restrictive
Despite rate cuts, borrowing conditions remain tight. CoreLogic cautioned that mortgage serviceability remains a challenge. Affordability remains a significant barrier for many buyers.
Rate cuts may ease some pressure, but experts say lending conditions must improve to support lasting growth.
Other Economic Factors Support Demand
Government cost-of-living relief and rising household incomes offer further support. Australia’s strong labour market also contributes to stable demand. These factors may partially offset affordability challenges.
Elliott believes these combined forces are unprecedented. “I’ve never seen so many things come together… to make property prices go up,” he said.
Also Read: Trump’s Tariff Tsunami Shakes Global Markets, Australia Braces for Economic Shock
Challenges for First-Home Buyers
While the outlook may benefit investors and homeowners, Elliott expressed concern for new buyers. “Bad news if you’re a first home buyer yet to get into the market,” he said.
Many first-home buyers continue to struggle with high prices, tight lending, and rising living costs.
Long-Term Growth Outlook Uncertain
Despite short-term gains, long-term growth remains unclear. CoreLogic warned that sustained growth will depend on affordability improvements. Experts stress the importance of broader economic stability and responsible lending.
Conclusion
Tom Elliott’s forecast aligns with emerging trends in the Australian property market. Falling interest rates, population growth, and investor sentiment are pushing prices upward. However, affordability and lending constraints may limit the extent of future gains.
