As we approach 2025, buyers still have a lot of questions about what might happen this year.
I personally think interest rates are going to play a role this year, and it appears that buyers are thinking along the same lines. However, regardless of what the RBA might do, this year could offer significant opportunities for those prepared to act.
But the key for most will be to start preparing now.
For anyone considering buying property in 2025, the first step should be understanding your financial position. Many homeowners across Australia, except in parts of Melbourne and Victoria, are sitting on considerable equity, thanks to strong growth in recent years.
Now is the time to talk to your broker or lender to assess your loan-to-value ratio (LVR). If your LVR has improved, you may be in a position to negotiate a better interest rate with your bank. Sometimes, simply filling out a discharge form and presenting it to your lender can lead to significant savings without even needing to refinance.
Getting your finances in order isn’t just about saving money, though; it’s about positioning yourself for opportunities.
In reality, the current market confidence is a little subdued, especially in foundational markets like Melbourne. However, as inquiries from interstate investors grow and the fundamentals of the Victorian market strengthen, this year could be an ideal time to buy in these areas before confidence rebounds and competition increases.
Looking ahead, there’s widespread speculation that interest rates may drop this year. While this is by no means guaranteed, history shows that a rate cut often triggers a surge in buyer activity.
Waiting for rates to fall could leave you competing in a much busier market, potentially paying more for the same property. If you’ve got the budget and the borrowing capacity, acting now might save you some money and stress down the track.
This approach is particularly smart in markets that have seen slower growth in recent years. Cities like Melbourne, which have lagged behind high-growth areas like Perth and Queensland, are now poised for a bounce. The fundamentals are pointing toward steady gains over the next five years, making it an excellent time to enter the market.
This year also represents a shift in market dynamics. Trading markets like Perth and regional Queensland, which have seen remarkable growth, still have some upside.
However, the real potential may lie in cities that have been overlooked, like Melbourne, where low confidence has created buying opportunities. These markets are likely to bounce back as fundamentals improve and confidence returns.
Ultimately, the key to making the most of this year is preparation. By getting your finances in order, understanding your borrowing capacity, and identifying markets with strong fundamentals, you’ll be well-positioned to capitalise on opportunities before they disappear. Property markets move in cycles, and the buyers who succeed are those who plan ahead and act strategically.
So, as the year winds down, take the time to reflect on your goals and get your finances in order. Talk to your broker, assess your equity, and consider where you want to be five years from now.
Because in property, timing is everything, and this year might just be your year to make it happen.