Ausbiz | Is the Housing Panic Overdone?

Has the Property Market Downturn Gone Too Far?

Matt Bell of Oliver Hume Property Group spoke to Ausbiz on the Reserve Bank of Australia's decision to hold the cash rate at 4.35 per cent, discussing what it signals for the rate cycle and the outlook for property market conditions.

Interest Rate Outlook and Market Conditions

Bell said the RBA's hold is a clear signal that policy is now firmly restrictive, with updated forecasts showing underlying inflation returning to the middle of the target band within 18 months without further hikes, suggesting the next move in rates is more likely down barring major external shocks. He noted a contrast between market pricing immediately after the statement and the more hawkish tone struck by Governor Michelle Bullock.

On the property market, Bell described substantial weakness, with the June and September quarters expected to be the toughest for both established housing and new dwellings. Auction clearance rates remain soft, particularly in Sydney and Melbourne, though Melbourne has lifted back to around 60 per cent.

Bell's Outlook for Recovery

Bell pointed to early signs of stabilisation in consumer sentiment and expects some positive indicators to emerge by December if households gain confidence that rates have peaked. Looking further ahead, he anticipates a recovery phase taking shape through 2026 and into 2027, underpinned by strong population growth and ongoing undersupply.

Bell also pushed back on bearish house price forecasts from ANZ, describing them as overly pessimistic, particularly for Sydney and Melbourne.

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