Australian homeowners, brace yourselves! Mortgage brokers are predicting a significant rise in house prices across Australia, driven by a perfect storm of factors: persistently low property supply and the anticipated easing of interest rates.

The news comes as the Australian Finance Group (AFG), a major player in the mortgage broking industry, revealed record settlement volumes. Their network of over 4,200 brokers facilitated a staggering $63 billion in residential mortgage settlements during the 2024 financial year – a clear indication of ongoing strong demand in the market.

Why the Price Surge? The core issue is simple: supply isn't keeping pace with demand. New construction projects have faced delays and rising costs, impacting the number of homes coming onto the market. Simultaneously, the Reserve Bank of Australia (RBA) is widely expected to begin cutting interest rates later this year, making mortgages more affordable and further stimulating buyer activity.

“We’re seeing a very tight market, with limited stock available,” explains a leading mortgage broker from AFG. “Combine that with the prospect of lower interest rates, and you’ve got a recipe for price growth. It’s not just about first-home buyers; investors are also circling, sensing an opportunity.”

Impact on Buyers and Sellers

For Buyers: The dream of homeownership is becoming increasingly challenging. Competition for properties is fierce, and prospective buyers need to be prepared to act quickly and potentially pay above the asking price. Pre-approval for a mortgage is more crucial than ever.

For Sellers: If you’re considering selling, now might be a very opportune time. The limited supply means you’re likely to attract strong interest and potentially achieve a premium price for your property.

Beyond the Headlines: Regional Variations While the overall trend points towards rising prices, it’s important to note that the impact will vary across different regions. Capital cities like Sydney and Melbourne are likely to see continued growth, but regional areas may experience more moderate increases. Factors like local employment rates and infrastructure projects will play a significant role.

What to Expect in the Coming Months? The next few months will be crucial in shaping the future of the Australian property market. The RBA’s decision on interest rates will be a key factor, as will any changes in government policy related to housing affordability. Mortgage brokers are advising potential buyers and sellers to stay informed and seek professional advice to navigate this dynamic market.

The AFG’s record settlement figures underscore the resilience of the Australian property market despite recent economic headwinds. While challenges remain, the outlook for house prices appears decidedly upward.