Headline inflation declines
Headline inflation fell from 4.2 per cent to 4 per cent in May, which was considerably lower than the median market forecast (4.3 per cent), largely thanks to lower fuel prices.
The fuel excise cut will be in part extended out beyond 30 June and through July, which will help to smooth the transition back to 'normality'.
That was the good news.
On the other hand, new dwelling price growth is accelerating again, rising by a strong 0.88 per cent in May for the fastest increase since 2022.
Rising building costs - together with crippled confidence in the housing sector - will likely soon become a headwind for new housing supply.
Rents are also reaccelerating, rising by 0.42 per cent in May, for the fastest increase in over a year.
As such, as the housing component group of consumer price inflation has picked up to 6½ per cent over the year to May 2026.
Source: ABS
Trimmed mean inflation thus rose from 3.4 per cent to 3.6 per cent for the 12 months to May 2026.
Source: ABS
An interest rate hike remains as about a 1 in 3 chance by for the August Reserve Bank meeting.
Australia's 3-year bond yield wasn't all that much changed on today's release, trading at just under 4.4 per cent, albeit it's a long way below recent highs.
---
In other news, new online job advertisements fell by -7,000 or -3.3 per cent in May as the economy looks to slow further from here, given low business confidence and near-record low employment confidence.
Source: Jobs & Skills Australia
Over the year declines were mainly driven by Victoria (-5.3 per cent), with Queensland suddenly now entering the chat (-5.3 per cent over the year) following a sharply monthly decline in Queensland vacancies in May (-2,700).
Source: Jobs & Skills Australia
SMSF changes
In a couple of recent podcasts, Batesy and I discussed the possibility of a ban on self-managed super fund borrowing for residential property, whereby I had noted a possible carve-out for new dwellings (on the assumption that the government presumably wants to encourage new dwelling supply).
Reportedly the government has agreed to a deal with the Greens for a prospective ban on new borrowing for all residential property in SMSFs, which is a surprise (to me anyway) given that up to a third of new apartment pre-sales in many developments may be accounted for by superannuation fund purchases.
For what it's worth, I obviously agree that property spruiking for new apartments in the SMSF sector has been a long-running regulatory challenge.
But the outright ban does seem likely to kill off a decent chunk of new developments as apartment pre-sales dry up.
Apart from the clear risk to new apartment supply, there's also a good chance that the electorate sees this as yet another broken pledge, with the Federal government's share of the primary vote falling as low as 27 per cent in recent polling.
The latest trend across all opinion polls has seen both of the traditional major parties take a hit.
---
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.
