REIQ applauds third consecutive rate cut as RBA targets economic stability
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The Real Estate Institute of Queensland (REIQ) has expressed approval following the Reserve Bank of Australia’s (RBA) decision to implement the third cash rate cut of 2025. This move comes as Australia grapples with weaker growth and reduced inflationary pressures, prompting the central bank to adjust its monetary policy to foster economic stability.
REIQ CEO Antonia Mercorella highlighted the significance of the RBA’s decision to lower the official cash rate by 25 basis points, bringing it down to 3.6 per cent. This adjustment builds on the RBA’s earlier reductions in February and May, marking a concerted effort to support households and stimulate economic activity across the nation.
“This third cash rate cut is a timely and necessary move by the RBA, given the subdued economic environment and moderating inflation,” said Ms Mercorella. Her comments underscore the broader economic context in which the rate cut has been made, noting that inflation is now comfortably within the RBA’s target band of 2-3 per cent. The annual Consumer Price Index (CPI) inflation was recorded at 2.1 per cent in the June quarter of 2025, with annual trimmed mean ‘core’ inflation at 2.7 per cent, the lowest in nearly four years.
Despite these positive indicators, business conditions remain relatively weak, and consumer confidence is subdued. Ms Mercorella pointed out that these factors necessitate the RBA’s intervention, especially following last month’s unexpected decision to hold the cash rate steady.
For Queensland homeowners, the rate cut offers a welcome financial reprieve. “A variable mortgage holder with the average new owner-occupier loan in Queensland of $647,000 could save approximately $97 per month if lenders pass on the full 25 basis point cut,” Ms Mercorella explained. When combined with the February and May reductions, this amounts to a potential monthly saving of $293, providing a significant boost to household budgets.
The impact of these savings varies with the size of the mortgage. For instance, a full 25 basis point cut would reduce monthly payments on a $500,000 mortgage by $76, while a $1 million mortgage would see monthly payments decrease by $150. These figures illustrate the tangible benefits for homeowners across different financial circumstances.
Beyond immediate savings, the cumulative effect of the three rate cuts in 2025 is expected to enhance borrowing capacity significantly. “A single buyer earning an average income of $103,450 could now afford around $30,900 more, while a dual-income household with two children could see their borrowing capacity boosted by approximately $39,400,” Ms Mercorella stated. Such increases could be pivotal for first-time home buyers, potentially making the difference between entering the property market or remaining on the sidelines.
However, Ms Mercorella cautioned that while the triple cut provides much-needed relief, it must be accompanied by efforts to address housing supply to ensure that affordability gains are sustained. Without action on the supply front, there is a risk that the benefits of the rate cuts could be undermined, leaving potential buyers still facing barriers to entry in the housing market.
The RBA’s decision reflects a broader strategy to stabilise the economy amidst a challenging landscape. With inflation under control and economic indicators pointing to a need for support, the central bank’s actions are aimed at fostering a conducive environment for growth and recovery. As the nation navigates these economic headwinds, stakeholders like the REIQ continue to advocate for measures that balance immediate relief with long-term sustainability in the housing sector.