Welcome back to our first update of 2025. We’re expecting a busy year ahead with an RBA rate cut last month (hopefully just the start), along with a rising clearance rate and increased stock levels.

Interest Rate Update

The RBA announced the first rate reduction in over 4 years, with a 0.25% drop bringing the cash rate down from 4.35% to 4.10%. All the major lenders have passed on this reduction to their customers over the last week.

This rate decrease means an estimated savings of $80 per month for households with a $500k loan.

Economists are predicting that there will be one to two more rate cuts this year, but the RBA is playing down any further reductions in the near future.

Property Prices

The monthly update from CoreLogic shows Melbourne property prices fell 2% in the three months to February 2025 and a fall of 3.3% over the past 12 months.

Source: CoreLogic

Property experts are predicting property growth for the remainder of 2025 and into 2026, with Melbourne prices up 3.5% this year.

Land tax…What are all the boomers complaining about

Land tax is an annual tax based on the total taxable value of all the land you own in Victoria, excluding exempt land such as your home (principal place of residence).

In recent years the state government has increased the land rax rate and this is hurting the hip pockets of investors and people with second houses (holiday homes).

Below is an example based on a property worth $1m; $700k land and $300k building.

• $1,475 land tax payable between 2009-21
• $2,850 land tax payable from 2024 onwards

Now let’s boomerfy the calc with a property worth $2m; $1.4m land and $600k building.

• $6,175 land tax payable between 2009-21
• $8,250 land tax payable from 2024 onwards

Link to a table showing the rates from 2022-23 compared to 2024 that has absentee owner surcharge. This shows how it increases with the more property you own.