Residential and commercial sectors set to benefit as borrowing costs ease
The Reserve Bank of Australia’s latest interest rate cut may give the housing and commercial property markets a boost in the coming months, according to real estate group Raine & Horne.
The RBA on Tuesday reduced the official cash rate by 25 basis points to 3.85%, marking its second reduction this year.
Raine & Horne executive chairman Angus Raine (pictured above) said the cut could lift buyer sentiment heading into winter.
“The rate cut will really get the market moving,” Raine said. “It’s not about the calculation and whether it’s 25 or 50 basis points cut — it’s the confidence boost that matters.
“This is likely the first of several cuts before the end of the year. With listings on the rise in some capital city markets already and consistent buyer demand, even two or three more cuts could send market confidence into overdrive with a strong pre-spring market now in prospect.”
Raine noted that signs of increased market confidence began to appear after the previous rate move in February. The company’s internal data shows property listings in Tasmania have risen nearly 48% compared to the same period last year. Buyer demand, meanwhile, has held steady. In Queensland, appraisal activity has climbed more than 44%, with listings up 5.2% and the total value of listed properties increasing by almost 23%.
“More importantly, total listing values are up 22.78% — a clear sign that experienced sellers can see the good times ahead,” Raine said.
Commercial outlook brightens
Raine & Horne chief executive Chris Nicholl said the latest rate cut could also support growing momentum in commercial real estate, especially in the industrial and office segments.
“The industrial market has remained a consistent standout, underpinned by e-commerce, logistics, and supply chain demand,” Nicholl said. “Warehouses, in particular, are highly sought after by investors, tenants, and owner-occupiers due to their critical role in modern distribution networks.”
He added that further reductions in the cash rate, which some analysts expect could reach up to three more by mid-next year, may strengthen investor interest in commercial assets. “Lower borrowing costs will make commercial acquisitions more attractive, particularly for owner-occupiers and investors looking for long-term stability,” he said.
Nicholl also pointed to changing expectations in the office sector as employees return to physical workplaces. “We’re seeing a growing return-to-office trend reshape tenant expectations,” he said. “Broadly speaking, investors and owner-occupiers are targeting buildings that tick multiple boxes—not just prime locations, but that are also energy efficient and offer amenities that make workplaces more engaging.”
He added that valuations are starting to reflect current interest rate conditions, opening the door for more transactions, particularly in central business districts.
“Ongoing volatility in global share markets is also prompting a shift in capital toward quality commercial property, where yields remain solid, and the long-term growth outlook is strong,” Nicholl said.
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