The ABS released the July inflation figures, which saw annual inflation fall from 3.8 per cent to 3½ per cent.
This was slightly above the median market forecast for a drop to 3.3 per cent, as end of year price resetting added to inflationary pressures.
Trimmed mean inflation also didn't slow, remaining at 3.6 per cent, which will be of concern to those setting fiscal and monetary policy:
Source: ABS
The biggest contributor to inflation over the past year continues to be housing (5 per cent).
The cost of new dwellings continued to rise in July, though with major developers collapsing in real time presumably the inflation pressures will be easing forthwith as pricing power fades.
In the monthly figures fuel prices rose 7½ per cent in July after three monthly falls, helping to juice the headline result.
Overall, this was a worse than expected result, and sees the odds of a rate hike in September rising to around a 1 in 3 possibility.
TheAustralian 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.
After a series of scrutinising news articles in recent weeks, New South Wales development group Bathla has gone into administration with over $3 billion in debts, a significant portion of which was owed to private credit funds.
The development group was founded in 1997.
It remains to be seen if the Bathla Group collapse spills over into materially greater problems for the private credit sector.
Sales and confidence have dropped severely for most housing market developers after the Federal Budget, and this has come on the back of interest rate increases and steepling construction costs since the COVID lockdowns and border closures.
According to the Bathla Group's website (now down) there are some 22,000 apartments in the group's development pipeline, and 3,500 houses.
Reportedly 15,000 of the homes are in the under construction phase.
Shane Oliver of AMP showed in the below graphic just how far behind the state's housing supply target New South Wales already is:
The Guardian reported that 1,522 construction firms collapsed in New South Wales over the course of the past financial year.
On these numbers it looks as though New South Wales will move into the next cycle with the most acute shortage of housing.
The development group's collapse was covered in more detail here and here (no paywall).
TheAustralian 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.
Here's what we discussed on the podcast this week:
"In this Australian Property Podcast episode, Pete Wargent and Chris Bates unpack a market that still looks soft on the surface but may be opening a sharper decision window for buyers, upgraders and long-term investors.
They explore how the post-Budget reset is changing behaviour on the ground, from investors stepping back and refinancers scrambling to lock in older valuations, to the early signs of more urgency ahead of the spring selling season.
Pete and Chris discuss why Sydney and Melbourne may now offer some of the best buying conditions seen in years, why quality owner-occupier stock could tighten again quickly, and why the real story is not just falling prices but shifting competition.
The conversation also digs into the second-order effects of policy change. They look at rental pressure, investor hotspots, rezoning and density in Sydney, and the practical ways households may rethink capital allocation if negative gearing and capital gains tax settings keep pushing people away from established property.
In the listener Q&A, they tackle whether selling down a large portfolio to buy a premium Sydney family home is smart capital recycling, and how the six-year CGT rule can change the tax treatment of an old and new home. If you want a practical read on where fear is building, where opportunity may be opening and what to watch next, this is a timely episode to queue up."
TheAustralian 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.
New home sales had been on a pretty solid run up until April 2026, but fell for a third consecutive month in July, as the new tax setting begin to bite on sentiment.
Source: HIA
New home sales appear likely to drop sharply over the next couple of years as market sentiment has tanked.
Mirvac and Stockland also reported this week that new home enquiries have slumped over recent months, with fewer new homes expected to built ahead.
In the short term, there's quite a pipeline of homes to be completed, but over the medium term, it looks like the crunch is underway.
Reported the Housing Industry Association:
“Households continue to face the cumulative impact of three interest rate increases this year. At the same time, uncertainty surrounding recent housing policy changes has encouraged many prospective purchasers to delay, or cancel, major financial decisions.
“In the three months to July, house prices nationally declined by 2.0 per cent, the largest quarterly fall since 2022. Because the new and established home markets are linked, a decline in established prices will lead a decline in new home sales and a slowing in home building.
“The adverse shock to established home prices, due to the Federal Budget, is likely to be one factor slowing sales of new homes."
TheAustralian 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.
TheAustralian 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.
In recent weeks there have been media reports of rents surging to record highs everywhere from the UK to New York City, despite many regulatory policies specifically designed to favour tenants.
Australia is about to embark on its own journey in this popular space, following the reform of property taxation and capital gains taxes in the May Federal Budget.
It's still very early days, of course, especially given that there are restrictions on giving tenants notice, and limitations on when and how much rents can be increased by, and so on.
SQM Research released its latest rental market update for the month of July, which showed that asking rents were +7.2 per cent higher than a year earlier.
House rents were +6.8 per cent higher nationally, and unit rents were up by +7.7 per cent over the year to July.
Especially strong double-digit growth was recorded for rentals in Brisbane, Darwin, and Hobart.
Rental vacancy rates remained tight at 1.3 per cent nationally, with exceptionally tight rental markets and vacancy rates of under 1 per cent continuing in Darwin, Hobart, Perth, Brisbane, and Adelaide.
July isn't typically a busy month for the rental market, so it will be interesting to see how this all develops over the coming year.
National Australia Bank put the cat among the pigeons in its commentary this week in stating that rents could rise by up to 30 per cent over the next couple of years as rentals dry up, though the government has denied that this will occur.
In reality, some markets will probably see some very large increases while others may not.
TheAustralian 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.
The ABS released the figures for wage prices in the June quarter.
Overall, wage price growth was 0.81 per cent seasonally adjusted across the June quarter, in line with the median market forecast, and representing another fairly steady result for a fifth consecutive quarter.
Over the year wage price growth slowed a bit further to 3.19 per cent, which was notably a little below Reserve Bank forecasts for 3.3 per cent (as recently published in the latest Statement on Monetary Policy).
The quarterly growth in wages was in part driven by bargaining agreements and the public sector, where wage price growth was a seasonally adjusted 0.92 per cent for the quarter.
On the other hand, private sector wage price growth was just 0.69 per cent, which was the lowest quarterly growth since 2021.
This suggests that perhaps there's just a little more slack in the labour force in the private sector of late.
However, it's worth noting that the Fair Work Commission award wages increase of a higher-than-expected 4¾ per cent will provide a boost to wages growth in the September quarter.
Wage price increases were fairly consistent over the year around the country ranging from the highest rates of growth in South Australia (3.6 per cent) and Queensland (3.4 per cent) to the lowest in Tasmania (2.9 per cent) and the Northern Territory (2.8 per cent) respectively.
More than 80 per cent of jobs are now seeing wages increases of under 4 per cent, which was the highest share in four years.
Overall, these figures were broadly in line with expectations, and perhaps appear to be consistent with a gradually softening labour market.
James Foster ran through the figures in a little more detail here.
The ABS will release the Labour Force figures for the month of July on Thursday morning (previewed here).
TheAustralian 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.
"In this Australian Property Podcast episode, Pete Wargent and Chris Bates unpack one of the biggest questions in property right now: is the current slowdown creating a genuine buying window, or are buyers still too early?
They break down the Reserve Bank’s August hold, what the latest press conference signals for rates, and why soft sentiment is colliding with an 11-week high in auction clearance rates. Melbourne is a major focus, with the pair exploring whether better auction results, stronger yields and years of underperformance could finally set the city up for a rebound.
Pete and Chris also dig into the listings story. They explain why higher stock levels matter, why some data sets are telling slightly different stories, and why buyers should watch what actually sells, what passes in and where competition is still real. Their broader message is that headline fear can hide the fact that quality assets may already be finding support.
The episode also covers mortgage competition, bank forecasts of deeper price falls, and why investor-heavy markets in Brisbane, Adelaide and Perth may still be the ones to watch most carefully from here.
In the listener Q&A, they tackle off-the-plan risk in Castle Hill and the leading indicators that matter most after the Budget.
If you want a practical market update on rates, listings, buyer psychology and where the next opportunities may emerge, this is a timely listen".
TheAustralian 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.
