Home buyer confidence in Windermere has received a boost following the Reserve Bank of Australia (RBA) officially cutting interest rates for the first time since November 2020, reducing the cash rate by 0.25% to 4.1%.
Major banks are now reducing their interest rates too, making it the perfect time for homebuyers to capitalise on lower mortgage repayments and secure their dream home in the estate.
Matt Bell, Chief Economist at Oliver Hume Real Estate, shared his insights on how this decision may impact home buyer assurance in the masterplanned community. He said, “the cut was widely expected, but it was only after December inflation came out in late January that the market was confident that the RBA would deliver.
“Historically, even one cut has led to increased activity in the new land market as confidence and borrowing capacity increase and I expect the same for potential Windermere customers.”
Matt noted that with two more 25 basis point cuts potentially priced in for 2025, demand for new homes in Melbourne’s West is likely to increase and build throughout the year. “Although these cuts will boost affordability for first-home buyers, they won’t fully close the gap. We have calculated 1% of cuts to improve borrowing capacity for a low-mid income household by around $75,000,” he said.
He observed that increased market activity has already been evident since late January and expects this momentum to continue, with significant improvement in Melbourne anticipated in the second half of 2025. Regarding pricing trends, he remarked that while the rate cut is positive, rebates and incentives in the wider market need to be worked through before land prices rise.
Discussing sales volumes, Matt highlighted that Windermere sales were slow last year and suggests a rebound in sales could occur in 2025. “While a single rate cut won’t drastically improve affordability, the need for at least three full rate cuts possibly four or more would make a real impact, along with stability on the building construction side.”
For prospective buyers, Matt advises not to wait for perfect market conditions. “The future is uncertain and if you are always waiting for the lowest interest rate or the absolute lowest price, you will never enter the market. For an asset held long-term, enter the market when you can, provided you can manage repayments when rates rise.”
Finally, when discussing government efforts to streamline land release and planning approvals, Matt was cautious. He noted that while the government’s focus is welcome, its past performance in this area has been slow. “On our analysis, the outlook for land release over the next five years compared to the last 15 is poor. This hurts affordability, as more land released would help limit price growth.”
Matt’s insights suggest that while the recent rate cut is already boosting buyer confidence, further cuts, pricing stability and effective government action will be crucial to addressing affordability challenges. As Windermere looks ahead to a positive 2025, the advice remains clear: seize the opportunity now, recognising that long-term value often outweighs short-term fluctuations.
To find an affordable land lot visit the Windermere Sales Gallery at 275 Greens Road, Mambourin to discuss land and home and land package opportunities. Open Saturday – Wednesday from 11am- 5pm.
