End of Year 2025 Newsletter
It has been an exciting year for the industry with interest rate cuts, new government schemes to help purchasers and the bounce back of property markets across all states.
We would like to pass on a big thanks to everyone we have worked with this year, everybody in our network has made it another great year. We have enjoyed working with you all.
Merry Christmas and happy New Years!
Interest Rate Update
The RBA’s latest meeting in December resulted in holding the cash rate at 3.60%. Rising inflation rates has dampened any expectations of a rate cut to finish the year.
We have seen three rate cuts this year, bringing the cash rate down 0.75%. This has assisted mortgage holders with reductions in repayments and has aided in increasing borrowing capacity for those looking to enter the property market.
Major lenders lenders are predicting rates to hold for an extended period going into 2026.
Property Prices
The property market is continuing on its upward trend, Cotality’s (formally CoreLogic) monthly update shows another month of growth for Melbourne property, with prices up 1.6% in the last three months and 4.2% in the last 12 months which is great capital growth for 2025. This highlights further positive signs and the effect of recent interest rate cuts on the property market.
Source: Cotality
First Home Guarantee Scheme Expansion
The federal government has brought forward the expanded First Home Guarantee Scheme to 1 October 2025—three months earlier than planned.
The scheme lets first home buyers purchase with just a 5% deposit and avoid lenders mortgage insurance (LMI).
From October, income caps will be removed, making the scheme available to all first home buyers—or anyone who hasn’t owned a property in the last 10 years—regardless of income.
Property price caps will also rise to $950k in Melbourne (up from $800k), and similar increases nationwide. Example of cash required for a first home buyer purchase in Melbourne using this scheme between a $600k and a $950k purchase:
Team Update
Please join us in congratulating Jackson and his wife in having their first child, a little boy named Sebastian! Welcome to Sebastian, he has joined the extended Pearse Financial team!
Holiday Hours
The Pearse Financial office will be closed from Tuesday the 23rd of December 2024 and will reopen on Monday the 12th of January 2025. We will be monitoring our emails from time to time to ensure we can attend to any urgent matters.
Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. Information in this article is correct as of the date of publication and is subject to change.