Blog post by Ben Kingsley

Interest Rate Cuts are coming in 2025 – what to do before the rush

In this important update, I want to share our thinking about what’s likely to happen to interest rates over the next 3 to 6 months.

Between Now and Christmas: Mortgage Holders

Although the economy is slowing and inflation is tracking towards the RBA’s 2-3% target range, there won’t be enough evidence or time for core inflation to be ‘sustainably’ within the target range. A pre-Christmas cash rate cut could do more harm than good, potentially reigniting inflationary pressures.

So, it’s either time to buckle down until early 2025 or, if you haven’t reviewed your mortgage in the last 12 months, it might be worthwhile to do so now. Interestingly, some 1- and 2-year fixed rate specials are appearing—often a signal that rates are about to drop. Depending on your circumstances, you could consider hedging your bets with a part-fixed, part-variable strategy. However, please consult your broker to explore what works best for you.

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Between Now and Christmas: Property Buyers (Owner-Occupiers & Investors)

The RBA’s next meeting is in early February. By then, they will have the festive season data and the critical December quarter CPI figures, which will inform any rate cut decision. If core inflation is within the 2-3% target range, the RBA may begin reducing rates, followed by further cuts to bring the cash rate to a neutral setting.

The pace and extent of these cuts will depend on how sluggish the economy becomes, as rate reductions typically take time to stimulate growth. This often leads to a couple of cuts initially, with further adjustments based on economic conditions.

When the first cut occurs—whether in February, March, or April—historically, property sentiment shifts positively, driving increased buyer demand.

Also, if our past experience is anything to go by, we usually see a 20-30% increase in appointment enquiries early in the year, as households set new goals and take steps towards achieving them. In fact, despite higher interest rates, we saw a 33% rise in appointment requests during January and February this year alone.

Why Am I Telling You This?

There are two key reasons:

People tend to shift their focus to Christmas and the festive season in November and December, paying less attention to their mortgages, finances, or property plans. But, as they saying goes, ‘it’s the early birds who usually get the worms’, so get ahead and start planning your investment journey now.
Opportunity lies in the current market conditions. The amount of property for sale in Australia hasn’t been this high since 2016, creating buyer-friendly conditions in some states and cities.

The big question is, how long will these conditions last?

I believe that early 2025, with potential rate cuts and low unemployment levels, will bring increased buyer demand and more competition in the property market.

This is why it’s essential for you—or anyone you know—to be aware of how things may unfold. If your next purchase is an investment, having a clear plan and being prepared to act now, while others are distracted by the festive season, could give you a significant advantage.

Our Property Planning team is currently filling their remaining appointment slots before Christmas. If you, or someone you know, needs assistance, I recommend securing one of these free and no-obligation initial appointments today here.

At Empower Wealth, we are committed to supporting and educating our clients every step of the way, helping them achieve their goals and desired outcomes.

Remember, knowledge is empowering—but only if you act on it. Let us help you, or someone you care about, take the first step while this short-term opportunity is still available.

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Categories: Money Management, Mortgage Broking, Property Investment Advice

Tags: Interest Rate, Interest Saving, investment savvy, Lending, Loan Process, Mortgage Brokers, property invesment, Refinance