Inside the suburb prepared for a $400 interest rate drop in 2025

One suburb could see mortgages drop by nearly $400 with just one interest-rate cut – and its homeowners might not even notice.

Homeowners in the Brisbane suburb likely to be most impacted by a future interest-rate cut may not even notice it.

Jeweller Adam Graham bought in New Farm before the pandemic and has seen the suburb skyrocket in price since.

Mr Graham said despite a number of possible interest rate cuts on the horizon this year, he would be hesitant to jump into New Farm’s housing market for the first time today.

“From my perspective,” he said, “if I had to pay what the land would cost now, and then what a build would cost? I don’t think, without the benefit of time, I would be going in and doing it now.”

Adam Graham and his family bought in New Farm before the pandemic – but even with a possible interest rate cut, they’re not sure they’d do the same if they went into the housing market today.

PropTrack research has found some homeowners across Brisbane would save nearly $400 a month on their mortgages from one interest rate cut alone.

New Farm in particular could be the most affected by such cuts. With a median house price of $2.93m, one cut alone could ease monthly repayments by $380.

Two cuts could bring that number to $770, three to $1,160, and four cuts could save homeowners a whopping $1,560 a month.

32 Browne St, New Farm: the home the Graham family are selling.

Mr Graham said despite these generous reductions, the suburb’s residents were well-prepared for living in an expensive housing market.

“One thing I noticed with New Farm as a suburb,” he said, “is mortgage stress is extremely low. And that’s probably because people have held property for a long, long time in New Farm, if they’re older families that [moved] before the prices went crazy”.

Instead, Mr Graham said those in more affordable suburbs would really feel the effect of a cut.

“In the high end, I just think the wealthy are definitely getting wealthier,” he said.

Mr Graham said “the wealthy are definitely getting wealthier”, and well-off people in suburbs like New Farm might not notice interest rate drops.

Place Ascot agent Patrick McKinnon, who is marketing Mr Graham’s home at 32 Browne St, said if a predicted interest rate cut were to go ahead, everyone would “feel that relief”.

“I think it relieves everyone’s pressure, whether it’s a $500k loan or a $2m loan,” he said. “I think it’ll give people a new-found confidence to put their hands up at auction.”

Mr McKinnon added whether or not all four interest rate would eventuate in 2025 partially depended on inflation and international finance.

”I think it will push some people into a higher budget … they [could] push into a property that they think will perform well over time.”

Mr Graham said he felt an interest-rate cut would encourage buyers to be bolder with where they tried to buy a home.

“I think it will push some people into a higher budget that they would spend, if the affordability was there for them,” he said. “I think if they’re bullish on those suburbs long-term, they [could] push into a property that they think will perform well over time.”

Originally published as Inside the suburb prepared for a $400 interest rate drop in 2025