The Reserve Bank of Australia (RBA) has reduced the official cash rate to 3.6%, marking its third cut in 2025 and the lowest level since April 2023. While anticipated after July’s pause, this decision carries important implications for property lawyers and conveyancers.
Lower interest rates tend to stimulate buyer demand, boost seller confidence, and lift transaction volumes, directly influencing your file load, turnaround times, and the types of matters you’ll see. But as the latest 2025 State of Real Estate Report reveals, affordability pressures remain one of the most significant hurdles for buyers, reshaping how clients approach their property journey and increasing the likelihood of complex financing arrangements.
The cut lands on the eve of spring, traditionally the busiest period in the property calendar. With 59% of buyers and sellers completing their property journey in under three months, lower borrowing costs could accelerate already-tight timelines, increasing the pressure on contract reviews, due diligence, and settlements.
Strong buyer demand will likely give vendors more negotiating power. In 2025, 51% of buyers reported feeling pressured to act quickly due to market competition, with 42% describing the experience as “stressful” or “extremely stressful”. This could lead to shorter negotiation windows and a greater need for finance clauses that protect your clients under rapid decision-making conditions.
While lower interest rates reduce repayment costs, a $750,000 mortgage could save around $111 per month from this latest cut alone, the report shows the impact of interest rates is mixed.
This suggests that while borrowing power will rise slightly, affordability constraints still force compromises on property type and location.
The report underscores that affordability remains the single greatest challenge in the property market:
In Sydney, the number of homes under $750,000 has fallen nearly 90% in the past decade, and nationally, first-home buyers made up just 15% of transactions, down from last year. This trend is pushing buyers toward:
If inflation continues to moderate, the RBA may keep easing rates into 2026, sustaining momentum. For property lawyers and conveyancers, that means:
The latest rate cut will add fuel to an already active market, but the 2025 State of Real Estate Report shows the twin forces of increased competition and persistent affordability barriers will define the months ahead. By staying ahead of these shifts and arming your clients with the right protections, you can help them navigate this fast-paced, high-stakes environment with confidence.
Access the full report here.
