An interest rate hold, so what happens to homebuying from here?

If you've tracked Aussie property over the years, you'll know that even after price dips it tends to bounce back.

Any number of graphs can show us this, including Corelogic's 30-year view between 1992 and 2022 which indicates that even after price drops in 2008 and 2012, the long-term upward trajectory continued shortly thereafter. 

This type of price 'recovery' can happen quite easily in big cities when you think about it, because if a given population continues to increase and the supply of new homes there remains fairly stagnant, it doesn't take a maths whiz to spot the surplus of people looking to buy. 

This is why managing director of SQM Research, Louis Christopher says that despite its recent slump Aussie property is going to recover, driven largely by Sydney’s market. In his most recent summary, Christopher says first time buyers and investors will be among those looking to buy. 

"There will be more first home buyers in the market place looking to get out of the rental crisis," Christopher said. "Once there is more evidence the downturn is over, property investors are going to jump into the market, looking for their hedge against inflation.”

He also notes that population growth will play a role as the government intends to keep increasing the number of newcomers to our shores. Then there's the small matter of the Reserve Bank's dedication to rate hikes, which paused for the first time in 11 months this April.

Some are now speculating that a rate cut is on the cards but Christopher says the chances of that won't happen until much later in the year. 

While a rate cut would potentially also bring more buyers back into the market, a mere pause could be enough for some to start thinking about property and researching home loans once again. 

This sentiment is shared by Corelogic's Tim Lawless who this week said that despite seeing the highest interest rates since 2012, we have seen a lift in housing values over the past month.

"This is a timely reminder that interest rates are but one of the many key factors influencing housing trends," Lawless said. "CoreLogic reported a 0.6% rise in the national Home Value Index for March, following six months where value declines were losing momentum.

"While we aren’t certain if March marks a turning point for housing values, it’s clear that low advertised supply, the tightest rental conditions on record and surging overseas migration are providing some positive momentum to housing markets."

All told, it might be time to start researching home loans if you have your eye on the property market. Our team of experts sift through the best home loans available to pick those with the best rates and features. So be sure to visit our Home Loans Hub to start comparing.