T
he Reserve Bank of Australia's decision to cut the cash rate for a third time this year is expected to spark a surge in property market activity, but experts warn it may not be good news for first-home buyers. The rate cut, which brings the cash rate down to 3.60 per cent, will likely drive up competition and potentially push prices higher.

    New data shows a significant increase in home loan pre-approvals, with Loan Market reporting a 53 per cent jump in July compared to last year. This surge is expected to flood the market, particularly in states like South Australia and the Northern Territory where pre-approvals are up by 80 per cent.

    The tight housing stock levels are already making it difficult for buyers, with new listings down 14.2 per cent compared to this time last year. Loan Market's David McQueen says buyers are looking for every advantage they can get, including knowing exactly what they can borrow and afford to repay.

    Experts predict that lenders may start to pull back on the size of future rate cuts as more are predicted. Graham Cooke from Finder urges homeowners to review their home loans, stating that if their current mortgage rate is higher than 5.5 per cent, they may be able to find a better deal.

    The rate cut has made some suburbs more affordable for first-home buyers. According to Finder analysis, the average single Australian can now afford a place for $570,000 or less, and the average Australian household with two incomes can look at suburbs where average prices are under $1,167,000.

    However, experts warn that increased market activity could drive up prices and deposit requirements, potentially negating the benefits of cheaper repayments.