NAB sees lending rise as buyers regain confidence

Author – Denton Pugh, NAB Executive for Home Lending. Originally published on News.com.au., opens in new window

Autumn is often one of the more practical periods on Australia’s property calendar. Summer’s distractions are out of the way, and winter’s slowdown hasn’t set in yet.

This year, that seasonal shift is also being impacted by broader economic changes. In February, the Reserve Bank delivered the first interest rate cut, with more expected in the coming months. Even before the cut was announced, speculation prompted a response in the housing market – both in sentiment and in price.

_{NAB Executive Home Lending Denton Pugh}

Nationally, property values rose +0.4% in March, setting a new national record by the end of the quarter. Darwin and Adelaide led the capitals with a +1% and +0.8% increase respectively, followed by Melbourne and Brisbane. After months of patchy growth and flat conditions, this has marked a bit of a turning point.

We’ve seen this momentum reflected in buyer behaviour. At NAB, lending activity has picked up across the past two months. First-home buyers are returning, upgraders are back in the market – lower rates are clearly improving confidence, not just borrowing capacity.

Of course, this isn’t a boom, but the tone has changed. Sellers are adjusting their expectations, buyer confidence is up, and the market is functioning with a level of stability we haven’t seen in some time.

Second to the busy spring period, April through to early June is typically one of the more active periods for real estate. But this year, it’s broken up by public holidays. The Easter break and Anzac Day fall in close succession, this could lead to fewer auctions and a more staggered flow of listings.

For buyers, that’s not necessarily a bad thing. With less competition and more room to negotiate, some may find this a more manageable time to purchase. Sellers are generally more flexible during slower weeks, and serious buyers who are ready to move often have the advantage. Buyers could look to take advantage of listings that are available during this period.

The key question is what happens next.

If inflation continues to fall and the Reserve Bank lowers rates again next month – which is what we expect – we’re likely to see further price growth and more buyer activity heading into winter. That could mean stronger competition in the second half of the year, particularly in capital cities where supply remains tight.

For now, though, autumn offers a relatively stable backdrop. Moderate price growth, steady demand, and improving sentiment. Of course, uncertainty still lingers – globally and locally. With the Australian federal election now called, ongoing discussions around tariffs, and broader economic conditions, buyers and sellers will be keeping one eye on the headlines.