Australia has now experienced three major interest rate cutting cycles since 2015, each producing very different impacts across the housing market.
“Australia has experienced three major interest rate cutting cycles since 2015, each delivering vastly different impacts across the housing market,” said Nerida Conisbee (pictured), chief economist at Ray White.
The Reserve Bank’s first easing came between May 2015 and May 2016, when rates fell from 2.25% to 1.5%. The second was the aggressive cutting cycle from June 2019 through the COVID emergency, which drove rates down to 0.10% by late 2020.
“The current cycle, beginning in 2024 from multi-year highs above 4%, represents the third distinct easing phase in a decade.
The first cycle was driven by a 0.75 percentage point cut, benefiting coastal lifestyle suburbs within commuting distance of Sydney.
The NSW Central Coast stood out, with Avoca Beach-Copacabana (8.0% growth), Wamberal-Forresters Beach (8.2%), and The Entrance (8.9%) all outperforming. These suburbs, priced between $800,000 and $1.2m at the time, attracted buyers seeking lifestyle with access to the city.
Conisbee noted that while the pandemic accelerated regional demand, “the reality is that it had already started quite some time earlier.”
The second cycle saw rates plunge from 1.50% to 0.10%, triggering a wealth effect that boosted premium markets.
Sydney’s top-performing suburbs included Turramurra (12.4% growth in 2019-20), Castle Hill precincts (over 12%), and Northern Beaches areas such as Collaroy and Freshwater, all recording double-digit gains.
Castle Hill was the standout for acceleration, with Baulkham Hills West-Bella Vista swinging from -7.2% growth to +12.4%, a 19.6 percentage point turnaround. These million-dollar-plus markets benefited most from ultra-low rates combined with fiscal stimulus.
The current cycle has reversed the pattern, with affordable outer suburban areas leading the response.
In Perth, Midland-Guildford (15.6%), Mandurah (15.5%) and Balga-Mirrabooka (15.4%) top national growth rates. Adelaide’s Smithfield-Elizabeth North followed closely at 14.4%.
These areas, typically priced between $550,000 and $750,000, represent classic first-home buyer markets, where borrowing capacity gains from rate cuts make the biggest difference.
The analysis shows a shift in who benefits most from monetary easing:
“The evolution of rate cut beneficiaries across three distinct cycles reveals fundamental shifts in Australia’s housing market dynamics,” Conisbee said. “From emerging coastal lifestyle markets in 2015-2016, to premium Sydney suburbs during the COVID emergency, to affordable outer areas today, each cycle is different.
“The Central Coast’s consistent performance across all cycles suggests certain markets maintain enduring rate sensitivity, but the dramatic swing from million-dollar suburbs to sub-$750,000 areas demonstrates how affordability constraints now dictate market responses.”
As further cuts are expected, Conisbee noted that “the current pattern suggests Australia’s monetary policy increasingly serves first-home buyers, a profound shift from what happened during COVID.
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