The Real Estate Institute of Queensland (REIQ) is welcoming the Reserve Bank of Australia’s (RBA) latest move to resume monetary easing, cutting the official cash rate by 25 basis points to 3.85 per cent – marking a return to the level last seen in May 2023.
REIQ CEO Antonia Mercorella said the rate cut would provide welcome relief for borrowers and much-needed stimulus for new housing supply.
“This cash rate cut is particularly critical for Queensland, where we’re experiencing above-average population growth and a pressing need for new housing construction,” Ms Mercorella said.
“With the Brisbane 2032 Olympic Games on the horizon, stimulating housing supply and infrastructure investment has never been more vital to ensuring the state is well-prepared to meet future needs – especially when the spotlight turns to Brisbane.”
Ms Mercorella said the cumulative impact of two 25 basis point rate cuts this year – today’s cut combined with February’s cut – would make a meaningful difference to borrowing capacity and mortgage savings.
“An additional rate cut is a welcome reprieve for homeowners, buyers, and investors,” she said.
“It provides breathing space for mortgage holders and encourages more Queenslanders to enter the property market.
“A variable mortgage holder with the average new owner-occupier loan in Queensland ($647,000) could see monthly savings of around $196 if the two cumulative 25 basis point rate cuts are fully passed on.
“Two rate cuts will also provide a boost to purchasing power – a single buyer on an average income could now afford around $20,000 more, while a dual-income household with two children could see an increase of approximately $30,000.*
“Home buyers, in particular first home buyers, should be encouraged by the effects of reducing the cash rate, despite first home buyer activity being below long-term averages.
“There were 17,513 new owner-occupier loans in Queensland during the March 2025 quarter – well below the historical average of 18,665.
“Investor sentiment, previously dampened by high borrowing costs, is also expected to be further bolstered by this second cash rate cut and the prospect of more to come.”
Ms Mercorella said the broader economic conditions supported the RBA’s decision, amid moderating inflation and relatively weak business conditions and confidence.
“Nationally, CPI inflation was 2.4% in the March 2025 quarter in annual terms, unchanged from the December 2024 quarter, while annual trimmed mean ‘core’ inflation came in at 2.9% in annual terms – both comfortably within the RBA’s 2-3% target band,” she said.
“Further, quarterly GDP growth through to December 2024 was below average at 0.6%, with GDP per capita down 0.7% year-on-year.
“While consumer sentiment rose by 2.2% in May 2025, this increase only partially offset the 6.0% drop in April, which followed the announcement of US tariffs and resulting financial market volatility.
“In the context of the global economic uncertainty, stemming largely from the US-China trade war, which could affect the stability of the Australian economy, a rate cut is a timely measure to help restore confidence.”
Ms Mercorella said that while the second rate cut brings more relief, it must be complemented by longer-term housing policy action, particularly on the supply side.
“Unless all levels of government take urgent action to boost new housing stock, any affordability gains from lower rates will be undermined by persistent undersupply,” she said.
“Concerningly, loan commitments to owner occupiers for the construction of new dwellings in Queensland remain low – 1,914 in the March 2025 quarter, compared to the historical average of 2,159 new loans.”
The REIQ’s analysis of ABS building approval data highlights significant shortfalls in the pipeline of new housing supply:
- Queensland’s annual housing target is around 49,000 dwellings.
- Over the past 12 months, only 37,300 dwellings were approved across Queensland (seasonally adjusted) – leaving a gap of 11,700 homes.
This pattern is repeated nationwide, with a national shortfall of over 57,000 dwellings versus the annual 240,000 new homes target, to meet the 1.2 million new homes over five years by mid-2029 national target.
ENDS
Media enquiries:
Claire Ryan, Media and Stakeholder Relations Manager, The Real Estate Institute of Queensland
M: 0417 623 723 E: media@reiq.com.au