Lower interest rates, easier money – the ripple effect on property prices and living costs

The latest interest rate cut by the Reserve Bank of Australia (RBA) means cheaper home loans and easier approvals, but get ready for higher property prices and living costs.

When money gets cheaper, assets and living costs usually get more expensive.

Here's the ripple effect of falling interest rates

• Central banks worldwide are cutting rates, and Australia is following this global trend.

  
  

• Lower rates mean cheaper loans - so it’s easier to borrow for property, business, or investment.

  
  

• More buyers in the market push up demand and prices, especially for property.

  
  

• Cheaper borrowing fuels spending on homes, goods, and services, driving prices higher.

  
  

• Rising property prices can lead to higher rents and increased spending, adding to inflation - meaning your money doesn’t go as far, and the overall cost of living goes up.

  
  

• Globally, more money in the system creates new opportunities but also makes markets more expensive and less predictable.

  
  

• What happens overseas now has a bigger impact on your financial plans here in Australia.

What can families and business owners do?

We’ve been here before. During the pandemic, low interest rates and extra money in the system pushed up property prices and led to more spending. That’s a big part of why things cost more now. With rates being cut again and more money flowing, we’re seeing some of those same trends return.

• If you already own property or good investments: Your wealth might go up on paper. Think about whether it’s a good time to review what you own or take some profits.

  
  

• If you’re thinking about buying or investing: Take your time. Just because loans are cheaper doesn’t mean you should rush in. Look for real value, not just what’s popular.

  
  

• For everyone: Only borrow what you can easily afford to repay, even if interest rates go up again later.

Bottom line

Take advantage of opportunities, but stay grounded. Review your goals, check your level of risk, and don’t get swept up in FOMO. If you want a clear, practical plan for your next move, let’s talk.

More soon.