The long-awaited interest rate-cutting cycle has finally begun, and it could mean big price growth for some Australian suburbs if the cuts continue in 2025. 

Some recent CoreLogic modelling showed that four rate cuts in total could bring gains as high as 19 per cent in some areas. 

Find out how falling interest rates could impact your market in 2025.

Why lower rates could mean higher prices

From November 2023 to January 2025, the Reserve Bank of Australia (RBA) held the cash rate at 4.35 per cent — the highest level since 2011. 

The high-rate environment has put significant pressure on buyers whose borrowing has been capped. Along with growing affordability issues around the country, it's been a key factor in the recent slowdown of property price growth. 

CoreLogic's head of research Eliza Owen explained that, with February's rate cut comes some welcome relief for borrowers. 

“Lower rates mean buyers can borrow more, spend more, and ultimately make housing a more attractive investment,” she said. 

While just one cut isn't expected to have a drastic impact on price growth trends, it likely signifies the beginning of a turnaround in consumer sentiment, and any further relief delivered by the RBA could really start to move the needle on home values once again. 

Every market will react in its own way, though, and some are primed to see far more growth than others if rates continue to fall. 

Four cuts could bring national growth of 6.1%

The RBA's first move of 2025 was to bring the cash rate down by -0.25 per cent. If we were to see a full -1.0 per cent decline this year, which banks like Westpac and CBA are forecasting, property prices could get a big boost. 

"CoreLogic estimates based on previous periods of rate reductions that national dwelling values would increase an average of 6.1 per cent for each 1 percentage point decline in the cash rate," Owen wrote. 

"But Australia is not one housing market," she continued. "If history is anything to go by, certain markets will see a bigger boost from rate reductions than others, and it may be because of market characteristics like price point, location and investor interest."

In particular, it's the more expensive markets that are typically more responsive to interest rate movements, especially when it comes to houses rather than units. 

According to their modelling, Sydney and Melbourne have the most to gain from a drop in interest rates, particularly locations where current median values are significantly below their peak levels. 

The more expensive end of Brisbane real estate is also tipped to see a solid uplift, while CoreLogic said Adelaide, Perth and the smaller capitals are less susceptible to the effects of interest rate movements. 

Which areas stand to gain the most? 

As CoreLogic noted, that 6.1 per cent potential growth figure only tells a very general story, and a number of areas could be in line for substantially higher gains. 

They released a collection of tables with the top 10 suburb areas across the capital cities that stand to see the strongest price growth according to their modelling. 

Here are the SA3s (suburb areas) in each city that stand to gain the most if interest rates drop a full 1.0 per cent.

Sydney SA3s with highest modelled value change from 1.0% reduction in cash rate

• Houses in Leichardt (+19.1%), Sutherland/Menai/Heathcote (+19.0%) and Warringah (+18.1%)
• Units in Dural/Wisemans Ferry (+17.7%), Chatswood/Lane Cove (+16.3%) and Campbelltown (+16.0%)

Melbourne SA3s with highest modelled value change from 1.0% reduction in cash rate

• Houses in Whitehorse (+18.4%), Essendon (+18.0%) and Manningham (+17.4%)
• Units in Glen Eira (+12.3%), Whitehorse (+10.6%) and Manningham (+9.8%)

Brisbane SA3s with highest modelled value change from 1.0% reduction in cash rate

• Houses in Sunnybank (+5.2%), Nathan (+5.1%) and Brisbane Inner/North (+4.9%)
• Units in Capalaba (+8.0%), Brisbane Inner/West (+7.8%) and Bribie/Beachmere (+5.6%)

Adelaide SA3s with highest modelled value change from 1.0% reduction in cash rate

• Houses in Port Adelaide (+5.1%), Gawler/Two Wells (+3.3%) and Mitcham (+3.0%)
• Units in Unley (+8.2%), Campbelltown (+4.3%) and Adelaide Hills (+2.9%)

Perth SA3s with highest modelled value change from 1.0% reduction in cash rate

• Houses in Bayswater/Bassendean (+3.1%), Perth City (+1.1%) and Serpentine/Jarrahdale (+1.0%)
• Units in Bayswater/Bassendean (+5.6%), Mundaring (+2.9%) and Mandurah (+1.9%)

For a full list of each city's potential top growth areas, check out CoreLogic's comprehensive rundown. 

It's important to note that the above is only modelling based on historical cash rate conditions and doesn't take into account other market factors.

Thinking of selling?

If you're looking to get in on the action in 2025, it's important to be as prepared as possible in order to cut through the competition and achieve a standout result. 

Step 1: Understanding how your market is performing

Every market is different, and understanding your local market is fundamental to making the right selling decisions. Our guide to tracking market trends and data will help you to get a clear picture of how your market is performing and how that impacts you as a seller. 

Step 2: Know what your property might be worth

Getting a free home value estimate is a great way to set a foundation for your selling expectations and begin planning the path forward.

Step 3: Get a no-obligation market appraisal from a top real estate agent

Understand what your property could sell for in the current market by speaking to the top-performing agents in your suburb. Comparing top agents in your area will help you find the perfect partner for your selling journey and move towards a successful result.

Step 4: Finally, get your property listing-ready

Taking a thorough approach to preparing your home for sale is another critical step. From cleaning, decluttering, painting and performing other cosmetic renovations to home staging, photography and marketing, getting your property to sale-ready condition is a must.