Podcast: Banks forecast 10% property drop: Is the Australian market crashing?

Property Podcast

Here's what Chris and I discussed on the podcast this week:

"The conversation covers the latest CoreLogic data showing capital city values down 1.3% in the June quarter, auction clearance rates slipping below 50%, and a drop in sales volumes.  

Pete shares his on-the-ground view that many prices are already 10-15% off peak levels but appear to have levelled off in recent weeks, with few genuine fire sales thanks to strong employment.

Pete and Chris examine the Federal Budget’s limited impact on home ownership rates, the SMSF lending ban wiping out potential gains from new housing initiatives, evaporating new home sales, and falling unit approvals. 

They discuss shifting sentiment in key markets — including Brisbane homeowners pulling sales and the forecast that Brisbane could soon overtake Sydney as the most expensive unit market — alongside inflation easing and banks revising 2026 price forecasts downward (with some predicting 5-10% national falls).

Main stories include “Budget buyer’s remorse” — why first-home buyer applications have slowed despite policy support — and a detailed look at what a further house price fall would actually mean for Australians. 

Drawing on 30 years of history analysed by ABC News Business, they highlight that past corrections have been relatively shallow (average -2.9%) while subsequent recoveries have been strong (+32% on average). 

They explore risks of negative equity for recent buyers, the chance of a larger correction, Sydney’s role as the market canary, and why fundamentals (jobs, rates, yields) still matter more than headlines.

The episode finishes with two practical listener questions: Chris shares the biggest structuring lessons from scaling Alcove and advising clients — particularly the one principle that separates successful long-term investors from those who get stuck or over-leveraged.

And Pete offers advice on how regular buyers can realistically access off-market and pre-market deals without a buyer’s agent.

Along the way, Pete and Chris offer strategic advice for buyers and sellers in nervous conditions, discuss wealth transfer opportunities, refinancing dynamics, and the importance of thinking long-term when sentiment shifts fast."

Tune in here (or click on the image below):

You can also watch the YouTube version here:

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    3. Subscribe for my free daily blog

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By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

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Sydney rentals the first shoe to drop

Sydney's tight rental market

Domain's rental market report for the June 2026 quarter makes for interesting reading. 

It notes that a sudden and very sharp increase in rents in Sydney, as well as Brisbane and Darwin, can have had little to do directly with policy changes from the Federal Budget.

It's simply far too early for there to have been any meaningful changes in rental property availability, noted Domain. 

June is also typically a quieter time of year for the rental market in any case:

Source: Domain

Instead, it seems as though landlords are positioning for a tighter rental market ahead and are pushing for higher rents opportunistically.

Indeed rents increased to new all-time highs across all 8 of the capital cities in the June quarter.

Sydney recorded the fastest increase in its rents in 4 years, while rental vacancies remained at record lows for the time of year:

Source: Domain

After the Budget was released, AIG's index of construction performance collapsed dramatically in the month of June, while anecdotally apartment projects in Sydney now appears to be stalling or hitting the skids:

Looking ahead for the next two years, this looks like - for want of a better phrase - a 'perfect storm' for a prospective rental crisis, with fewer first homebuyers confident enough to buy, immigration still running at high levels, and apartment construction in danger of stalling.

All of which are dynamics which will add substantially to the pool of renters over the next couple of years. 

The Greens have already called for a national rent freeze to combat rising rents.

Negative gearing reform

One of the longest-running debates in Aussie macro is the impact (or otherwise) of negative gearing reform on the rental market in the brief two-year period between July 1985 and July 1987, whereby rents surged significantly higher in Sydney and Perth, but far less so in other capital cities. 

Stuart Wemyss with the chart, via LinkedIn:

Source: Stuart Wemyss, ProSolution

In truth, the only lucid memories I have of that time are of Tim Robinson and David Gower slaying the Aussies in the 1985 Ashes, and I certainly wasn't thinking about rental markets. 

What I can remember was attending a corporate seminar in Sydney in 2008 during the financial crisis shock, and a number of affluent young professionals bemoaning exorbitant increases in their rents of up to 40 per cent. 

Looking back through the archives, the official stats show that Sydney rents increased by 'only' 8 per cent in the tumultuous June 2008 quarter, though notably the rental price increases through the global financial crisis were often much sharper in inner- and middle-ring Sydney.

Source: Sydney Morning Herald

We're seemingly heading into a similar rental shock for Sydney housing market, but as implied by Stuart's chart above, it might well prove to be 12 months or more before the rental supply/demand imbalance definitively bites. 

This time around we have significant changes to both negative gearing and to capital gains tax, meaning that there's very little incentive to become a landlord in the established market going forward, unless prices and rents move markedly (or were mortgage rates to fall sharply). 

The biggest impact on rents is likely to be on the scarcer rental property types, such as 3-bedroom houses in Sydney's inner west, eastern suburbs, or lower north shore, for example. 

In summary, then, it's early days, but there already seem to be plenty of challenges ahead for the new tax policies.

---

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Sydney house rents jump +6.3pc in June quarter

Rents surging

One of the big question marks around the government's property tax changes is whether they will result in rising rents (and if so, where?).

Report today from Domain:

"The federal budget’s controversial property tax changes are yet to formally bite, but fears over their impact may already be rippling through Australia’s rental market, as new data reveals Sydney house rents have surged $50 a week in just 90 days.

The latest Domain Rent Report, released Thursday, found Sydney house rents jumped 6.3 per cent over the June quarter – the strongest quarterly growth in four years – while house rents hit record highs across Australia.

Experts say landlords are hiking rent prices in advance of the changes, and warn the sharp re-acceleration in rent growth may only be the beginning, with the full impact of the Budget changes still several quarters away."

The latest numbers from Domain showed a large surge in rents in the most expensive capital city (both for houses and for units).

Sydney house rents increased +6.3 per cent over the June quarter.

Darwin house rents rose +5.6 per cent over the quarter, and in Brisbane the increase was +2.9 per cent. 

Source: Domain

For units the largest quarterly increases were seen in Darwin (+8.3 per cent), Sydney (+4 per cent), and Hobart (+4 per cent). 

You can read the full Domain quarterly rental report here.

---

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Dwelling starts tumble

Dwelling supply lags further

New dwelling commencements fell -11 per cent in the March quarter to around 48,000, seasonally adjusted. 

These figures are yet to show the deleterious impact of several interest rate hikes this year and the tax changes in the Federal Budget, so new dwelling starts will likely fall further as we move into 2027.

Completions continued to be slower still, at only 43,800 for the March 2026 quarter.

As a result, the number of dwellings counted as 'under construction' increased again, to around 243,000.

The main increase in the dwelling supply pipeline has been driven by units under construction around many parts of Brisbane and regional Queensland (as noted here previously).

The wrap

The divergence between dwelling commencements (48,000) and completions (43,600) continued in the March quarter.

There's no doubt that dwelling supply hitting in the market has been far slower than had been hoped for. 

The reasons for this are presumably multi-faceted, with cost escalation for materials and trade, delays, and developer insolvencies all likely to be salient factors. 

In any case, immigration has been higher than expected, while dwelling completions have been lower than expected, accounting for record low rental vacancy rates. 

Looking ahead, cost pressures look likely to remain an issue for developers.

The amount of work yet to be done in the non-residential space expanded to a record high in the March quarter, driven by the unprecedented boom in data centres approved, the CapEx investment being heavily concentrated in New South Wales and Victoria.

---

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

ausbiz TV: Housing market latest

ausbiz TV

I joined Andrew G at ausbiz TV to discuss the latest housing market trends.

Tune in here (or click on the image below):

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1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Oil prices reverse their gains; construction collapses

Round trip for oil

Since the open/hot war phase of the conflict in Iran began in February 2026, Aussie households have endured three interest rate hikes taking the cash rate target back up to a cycle high of 4.35 per cent, as the central bank tackled the anticipated wave of inflation. 

And yet futures markets have seen all of the wartime increases in oil futures erased. 

Today, crude oil prices are trading all the way back down at $68/barrel. 

Bloomberg described how a peace deal has unleashed a wave of oil supply, overwhelming buyer demand for oil.

Confidence crunched

Today, the Melbourne Institute released its monthly inflation gauge for the month of June, which came in at -0.4 per cent for the month, helped by lower fuel prices.

The annual headline inflation figure fell sharply from 4.4 per cent to 3.9 per cent, while the trimmed mean inflation figure also declined sharply, all the way back into the target range at 2.78 per cent.

Shane Oliver from AMP with the chart:

Source: Shane Oliver, AMP, Melbourne Institute

Obviously this index isn't watched as closely now the ABS has a monthly inflation index of its own, but if this result is even remotely replicated in the ABS measures in June that will be a very good thing.

It also raises the question of how soon interest rates will be on the way back down again to prop up the ailing Aussie economy. 

Confidence in the Aussie economy has been crunched since the Federal Budget was released in May, with housing market activity also drying up.

Last week the ABS reported a new series of underemployment and underutilisation measures, which underscored that the youth underemployment issue is becoming significantly very quickly.

Justin Fabo of Antipodean Macro showed how the slowdown in hiring is disproportionately impacted younger Aussies. 

Source: Justin Fabo, Antipodean Macro, ABS

It's also worth noting that measures of construction activity have completely collapsed since the Federal Budget. 

Noted AIG:

Source: AIG

Markets a still pricing a chance of a hike later in 2026, for now, but it looks like the economy is going to pretty cooked in the current environment. 

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1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Podcast: Budget fallout, SMSF lending ban, & the property-versus-shares debate

Australian Property Podcast

Here's what we covered on the podcast this week:

In this episode of Australian Property Podcast, Pete Wargent and Chris Bates break down the latest property-market shake-up and what it means for buyers, investors and borrowers. The conversation centres on the Federal Budget fallout, the ban on SMSF lending into property, weaker auction conditions and the way sentiment has turned across key housing markets.

Pete and Chris unpack why Sydney and Melbourne were already softening before the policy changes, how investor demand is fading in the established market, and why rental yields and mortgage rates still matter more than headlines. They also explain where they are still seeing activity, from first-home buyers and upgraders to smaller renovation projects, while caution remains high around leveraged property investing.

The episode finishes with two practical listener questions: whether to sell a negatively geared investment property when cash flow is tight, and when property can still make sense versus shares in 2026. Along the way, Pete and Chris explore refinancing dynamics, the role of super, the trade-offs between liquidity and leverage, and how to think about risk when conditions are changing fast. If you want a grounded weekly read on the Australian housing market, mortgage trends and investing decisions, this episode is a useful snapshot of where the market stands right now.

Tune in here (or click on the image below):

You can also watch the YouTube version here:

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1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.

Unit approvals trend lower

Data centres surge

The ABS released the May building approvals figures, which showed solid enough figures for detached houses - mainly driven by double-digit growth across Greater Perth - with pretty flat figures for elsewhere. 

Attached dwelling approvals remained tepid in Sydney and Melbourne, with south-east Queensland remaining the one area of relative strength in the country (notably: Brisbane, Redcliffe, Gold Coast, Maroochydore). 

Overall, house approvals are trending higher - essentially thanks to Perth - and unit approvals are now trending lower, with higher mortgage rates and surging building costs now acting as headwinds for the medium-density sector. 

Over the year, there were around 201,000 dwellings approved. 

Over the past two years, about 16,000 dwellings have been approved per month, approximately 20 per cent lower than would be required to meet the government's target of 1.2 million new homes over 5 years. 

I doubt the government will mention the Housing Accord target much from here on out, and it was probably not that much of a serious target anyway.

Going forward, dwelling approvals and dwelling starts are likely to fall away, driven by Sydney and Melbourne, in the aftermath of the Federal Budget changes to property tax legislation. 

It's worth noting that the focus of construction work will likely now pivot away from housing and towards data centres in Sydney and Melbourne. 

The value of building approvals for data centres has surged, as we've previously seen reflected in the private new CapEx figures.

Reported the ABS this morning:

"Approved non-residential building rose 41 per cent (to $10.83 billion), following a 22.9 per cent April rise. This was a record high for non-residential building and was driven by a rise in large data centre approvals located in New South Wales and Victoria.

The value of total residential building value dropped 5.7 per cent (to $10.24 billion)."

James Foster ran through the building approvals figures in more detail here.

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Cotality also released its latest monthly home values index this morning. 

Detached house prices over the year to date are down significantly in two cities, namely Sydney (-4.2 per cent) and Melbourne (-4.4 per cent), with small declines for unit prices also recorded. 

It's typically a quiet time of year for the rental market, but in June we saw the first potential signs of an increase in rental price growth, with rents rising by a seasonally adjusted 0.5 per cent over the month, to be 5.9 per cent higher over the year.

Source: Cotality

Rents have increased by around 42 per cent over the past five years, Cotality reported. 

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The WTI crude oil price fell below $68.50 today for the first time in 4 months. 

---

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 18k followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

4. Work with me privately

For a limited time you can book in a free diagnosis call with me here, so book in a call today.