2025 in Review
2025 was a year of two halves for Australian property. Rate cuts delivered repayment relief, but sustained price growth across most capitals meant the gap between renting and owning remained stubbornly wide — particularly for first home buyers.
The Rate Cut Story
Three cuts totalling 75 basis points — February, May, and August — pushed the cash rate from 4.35% to 3.60%. For a borrower with a $600,000 variable-rate mortgage, cumulative savings were approximately $270/month. Borrowing capacity improved meaningfully.
But Prices Rose Faster
The national median home price hit a record $880,000 in December 2025 — up 8.8% for the year. In the markets where first home buyers are most active, prices also rose:
- Melbourne outer west (Melton, Wyndham Vale): up ~6–8%
- Brisbane Logan/Ipswich: up ~10–12%
- Perth northern/southern corridors: up ~15–18%
The Home Guarantee Scheme Goes Unlimited
The most significant policy development came on October 1, 2025, when the Home Guarantee Scheme removed all annual place limits and income caps. All eligible first home buyers with a 5% deposit can now access the scheme without competing for a capped allocation.
Looking Ahead to 2026
The RBA’s February and March 2026 hikes have already begun resetting conditions. First home buyers entering in 2026 face a more challenging environment than those who acted at the mid-2025 peak. Financial advisers recommend stress-testing repayments at rates 1.5–2% above current variable rates.
