 Market commentators are expecting a big jump in refinancing activity in the coming weeks, given that numerous borrowers switched home loans earlier in the year following the previous cash rate cut, in February, by the Reserve Bank of Australia.
Equifax, a credit reporting agency, has reported that the number of mortgage applications in the first quarter of 2025 was 5.2% higher than the same quarter the year before. Refinancers played a major role in that increase, with refinancing accounting for 37% of mortgage demand in the month of March. 3 key things to consider before refinancing your home loan:
 More than 65 lenders, including the big four banks, have cut their interest rates following the Reserve Bank of Australia’s decision to reduce the cash rate from 4.10% to 3.85%. This will mean lower repayments for the typical variable-rate borrower – although the size of the rate cuts, and the dates at which they’re taking effect, is varying from lender to lender.  Here are three tips to bear in mind in this downward interest rate environment:
 Residential construction costs rose just 0.4% in the March quarter, which was the lowest quarterly increase since 2010, according to the Cordell Construction Cost Index. As a result, annual cost growth fell from 4.0% in the December quarter to 3.4% in the March quarter.
However, building costs have risen 31.3% since the start of the pandemic in March 2020, so this slowdown in price growth is coming off a high base. Builders are struggling to cope with higher supply costs and a shortage of skilled tradespeople. That said, there is plenty of homebuilding activity taking place around the country. Multinational construction group RLB reported there were 487 residential construction cranes operating during the first quarter of 2025. While this was 9.8% lower than the 540 residential cranes from the year before, it was still high by historical standards. Please contact me if you're thinking about building a home. I can help you secure a pre-approval for a construction loan, which will give you clarity around your budget. I can also explain how construction loans work, so you can begin the process with confidence.  Surveys of property investors have confirmed that although investing can be a fantastic way to build long-term wealth, investors need to be prepared to weather periods of negative cash flow, especially in the early years.
The Property Investment Professionals of Australia (PIPA) found that 65% of the investors they surveyed were negatively geared in 2024, up from 57% in 2023. PIPA chair Nicola McDougall said the results confirmed that being a property investor involves both upsides as well as challenges. “Interest rates remain significantly higher than they were a few years ago and, while rents have risen, they are a drop in the ocean compared to higher lending costs,” she said. If you're a property investor, here are five tips for managing your financial position:
 The latest inflation data, which were recorded before the USA's recent series of tariff announcements, show further progress in the battle against inflation, making future interest rate cuts more likely. The annual headline inflation rate fell from 2.5% in January to 2.4% in February, according to the Australian Bureau of Statistics, which was the seventh consecutive month it had been within the Reserve Bank of Australia's (RBA) target range of 2-3%. Also, the annual trimmed mean inflation rate (which the RBA regards as more reliable, because it excludes items with wild price swings from inflation calculations) fell from 2.8% in January to 2.7% in February, which was the third consecutive month it had been within the target range.  The RBA has kept interest rates quite high over the past three years, in order to reduce demand from the economy and put downward pressure on inflation.
If the RBA believes inflation is now under control, it may consider reducing the cash rate at its next monetary policy meeting in May, which would prompt lenders to reduce their mortgage rates. That said, the RBA may place even greater weight on the global instability caused by the tariff issue when deciding whether to change the cash rate. |