How to Trump the Australian Property Market

For the first time since November 2020, the Reserve Bank of Australia (RBA) has cut interest rates. While this should be welcome news for borrowers, we can’t help but question—why now? The economic indicators the RBA claims to base its decisions on haven’t dramatically changed from previous months when rates remained unchanged (and we have been suggesting that rates should have been reduced late last year), yet political pressure has certainly escalated. Could this be a case of conveniently timed policy shifts or just that the RBA indicators are always on past data and while we live in the now, they are always in catch-up? Regardless of the motivation, one thing is clear: Australia’s housing crisis is far from over, and real structural change is still desperately needed.

If We Had Executive Order Powers…

Mal is currently in the U.S. observing one of the most politically reactive periods in decades, with sweeping executive orders being rolled out. It got us thinking—if we had the power to issue executive orders in Australian property and finance policy, here’s what we would do:

1. Restructure the RBA – The RBA needs a rework. The whole framework and arbitrary methodology have continually let us down. Not to mention that the world will be a very different place for the next 30 years compared to the last 30 years. On top of that, monetary and fiscal policymakers must work together, not against each other. Monetary policy alone can’t fix the housing crisis. A new, coordinated body needs to be created to make both monetary and fiscal policy decisions in tandem so one does not counteract the other.
2. Scrap APRA and Its Policies – APRA’s arbitrary assessment rates and restrictive lending policies have severely hindered investment and housing supply, we’d even go so far as to say they caused homelessness like we’ve never seen before. They were implemented in response to fears of an “investor-led boom” but have only contributed to housing undersupply and skyrocketing rents. Once again, decision-making based on oversimplified, aggregated data has led to poor regulation that impacts real people—without any tangible benefit to an already highly regulated and stable banking system. It’s time to rethink outdated institutions and replace them with a framework that truly understands and supports Australia’s complex housing landscape.
3. Coordinate a National Approach to Housing – The current fragmented system between federal, state, and local governments isn’t working. We need a national housing policy that ensures long-term, strategic planning instead of patchwork, short-term “solutions” that often cause more problems than they solve. A holistic approach to solving causes, not a myopic approach to solving symptoms.
4. Restructure Taxation and Abolish Stamp Duty – Stamp duty was supposed to be abolished with the introduction of GST, yet state governments have clung to it like an addiction. Tax reform is needed to remove excessive levies and fees that make housing more expensive. There is a better way.
5. Eliminate Arbitrary Construction and Development Policies – Too many regulations are bandaid solutions, but what’s worse is that applying that bandaid reopens old wounds making matters worse with bleeding and scarring that make healing this space a great challenge. These reactive measures create unnecessary delays, increase costs, and ultimately restrict the housing supply when we need it most. Again, let’s look at the overall challenges, not political knee-jerking symptom responses.

The Bigger Picture: What This Means for Investors

While rate cuts might offer short-term relief for some borrowers, they don’t solve the underlying issues in the housing market and we don’t actually have the power to roll out those executive orders (but we’ll keep pushing every opportunity we get!). The reality is that Australia is still facing severe housing undersupply, and without bold structural reforms, the situation will continue to deteriorate. We expect that with the lowering of interest rates, we’ll see an influx of activity in the property market from pent-up demand through both increasing confidence and lending serviceability that will ultimately see prices continue to rise – great for those already with investments, and a short timeframe for those looking to make their next move ahead of the price curve. That’s why it’s crucial for investors to stay informed and strategic in their property decisions.

We dive deeper into these issues in our Sunshine Coast Property Market Update (SCPMU), including the “How Did We Get Here” special lift-out, which breaks down the long-term causes of Australia’s housing crisis. If you haven’t read it yet, now is the time.

Want to Stay Ahead? Let’s Talk Strategy

As we head into a shifting interest rate environment, now is the perfect time to review your investment strategy. Whether it’s leveraging equity, expanding your portfolio, or positioning yourself ahead of future growth, our team is here to help. Book a strategy session with your Property Coach today and take control of your next move.