Unlocking property investment potential amidst falling interest rates

With the investment landscape shifting, you might be wondering if property deserves a spot in your portfolio. We take a closer look at when and how residential property could complement your existing strategy – covering the potential benefits, risks and exactly what’s involved. Plus, discover the tools and support if you’re keen to explore things further.

Why property could be worth a look

When interest rates start to fall, it often gets investors thinking – could it be time to revisit property? Historically, rate cuts have triggered a shift in momentum, with more investors turning to real estate as borrowing becomes cheaper and the potential for returns improves. Property offers something you can see and touch, and for many, that tangibility brings a sense of security. Whether you're looking for rental income, long-term growth, or just want to diversify your portfolio, property might be worth putting back on your radar.

What the data says

If you’ve been in the game for a while, you’ll know that property often lags equities during an economic upturn – but can go the distance in the long run. Following rate cuts, housing markets have historically seen a resurgence, particularly in Australia where demand and migration often drive strong fundamentals.

According to CoreLogic, national dwelling values rose 25.5% in the 18 months following the 2020 rate cuts¹. And while the Reserve Bank of Australia (RBA) cautions that monetary policy impacts vary by region and market cycle, it also notes that property prices tend to respond positively to lower interest rates over time, particularly as credit becomes more accessible and investor sentiment improves².

Another interesting trend: property often performs well as part of a diversified strategy during periods of lower bond yields and volatile equities. As of early 2025, investor lending has also begun to climb again, with ABS figures showing a 7.2% year-on-year increase in housing investment loans – signalling renewed confidence from more experienced market participants³.

Remember, context is everything

Just like with any investment, it’s important to understand the broader picture before making a move. For instance, the performance of property depends on several factors, including location, local infrastructure, housing demand and economic conditions. These variables can influence the timing and outcomes of your investment.

Understanding the process

Buying an investment property typically involves more steps than investing in shares. Both involve a healthy measure of research, but beyond that, there’s finance to secure and costs to consider (think stamp duty, legal fees, maintenance and insurance). Learning the basics of how property investment works – such as how rental yields and capital growth can influence returns – can help you decide whether it aligns with your long-term financial goals.

Feeling confident about the next step

If you're thinking about exploring property further, it's useful to understand how home loans work for investors. This includes how much you may be able to borrow, what loan features are available (like offset accounts or interest-only options) and how repayments could fit within your broader financial plan. CommBank offers tools and support to help you compare home loan options, understand eligibility and take the first steps towards applying – if and when you're ready. By getting familiar with the process early, you’ll be in a better position to make informed decisions.