Rental price pressures eased
Cotality's monthly chart pack showed that the inflation in rents is now calming down nicely, after the huge run-up in rental prices since 2020.
Housing costs - including rents and construction costs - have been a very significant contributor to the inflation spike in recent years, so this is another win for the central bank to see rental price pressures easing.
Source: Cotality
SQM Research also reported that asking rents - while still up by 4.2 per cent over the year - didn't increase at all in May 2025, reflecting a similar easing in inflationary pressures.
That said, the housing shortage hasn't really gone away, we're just bunching up more, with average household sizes now increasing.
SQM reported that the national vacancy rate fell in May 2025 to just 1.2 per cent, even at what is typically a seasonally quiet time of year for the rentals market.
Notably 5 of the 8 capital cities had extremely low rental vacancy rates of under 1 per cent, with Brisbane, Darwin, Sydney, Hobart, and Canberra all now trending lower.
Meanwhile, Cotality reported that total property stock listings have drifted lower and are now way down on their 5-year average (-13.2 per cent) as we move through the cooler winter months, reflecting a general dearth of quality properties for sale on the market.
Source: Cotality
The housing shortage hasn't been addressed yet, then; if anything, for now it's still getting worse.
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In other news, US core inflation came in lower than expected at just 0.1 per cent last month, while the 3-month annualised figure for headline inflation has stalled to just 1 per cent.
Meanwhile the UK's economy and jobs market both appear to be shrinking in a potentially nasty manner.
This all adds to the generally dovish narrative surround the outlook for global interest rates in 2025 and beyond.
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