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Mortgage holders and investors in affluent suburbs across two major capital cities will benefit the most from the Reserve Bank's modest rate cut, a property expert has revealed.
Director of Metropole Property Strategists Michael Yardney said owners who already have a foot in the door across "premium" suburbs in Sydney and Melbourne will see the biggest house price rises.
Yardney predicted the Victorian capital, in particular, may see a flood of investors keen to snap up properties which have generally slumped in price in response to the RBA's 0.25 per cent cash rate cut.
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Property prices in Melbourne may be buoyed by the rate cut after a four-year slump, he said.
Yardney forecasts Melbourne will be a hotspot for hawkish property investors watching this market.
"While the affordable end of the Melbourne market outperformed over the last few years as more affluent homeowners 'sat on their hands', it is likely the increased confidence that the interest rate drop will bring will now encourage these homeowners to get on with their life plans," he said.
"More and more property investors are taking advantage of the window of opportunity to get into Australia's second biggest housing market prices that won't be available in a year or two's time."
But it's bad news for struggling mortgage holders or young Australians still trying to buy their first home, he warned.
"The benefits from the rate cut will not be distributed equally," Yardney told 9news.com.au.
"High-income earners with significant equity in their properties are likely to feel more confident in re-entering the property market than Aussie battlers who have been hurt by the cost of living crisis."
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A rate cut traditionally boosts faith in Australia's property market and pushes house prices up.
Historical data points to an average 19 per cent price increase as a result of a one per cent rate cut, mostly in premium markets.
Yardney said wealthy locations in the NSW and Victorian capitals would enjoy the most significant price rebounds.
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He predicted the impact will be noticeable in the next few weeks of auctions in Melbourne and Sydney.
"This time around it is likely that the 0.25 per cent interest rate cut will stabilise house prices in Melbourne and Sydney, which have been falling over the last few months, rather than igniting the next phase of the property cycle," he said.
"2025 has started with strong auction clearance rates in Melbourne and Sydney, which are a good indication of the depth of buyer interest, and it is likely that the next couple of weekends will see strong auction clearance results in our two big capital cities."
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