Inflation lower than expected (rates on hold)

Inflation softer than feared

We haven't had many pleasant surprises since Budget day, but we got one today.

Headline inflation came in lower than expected at 3.8 per cent over the year to June 2026.

The trimmed mean inflation figure also held at 3.6 per cent over the year, which was lower than market expectations, while the quarterly figure for trimmed mean inflation of 0.8 per cent was some way below the Reserve Bank's 1 per cent trajectory forecast. 

Source: ABS

To two decimal places, trimmed mean inflation was 0.81 per cent in the June quarter, which was the lowest result in over a year.

The main contributor to inflation was the housing component, which rose by 6.8 per cent over the year, which was the highest level in three years.

Electricity prices were more than 22 per cent higher than a year ago as rebates ended, rents were up to a record high, and of course the price of new dwellings is now up by 47 per cent since April 2021. 

The NSW Productivity Commission found that last year it cost $1.05 million to build a typical mid-rise apartment in Sydney, up from $917,000 in 2023.

Source: NSW Productivity Commission

Developer feasibility is higher in Sydney's eastern suburbs because of the very high apartment prices that developer's can achieve in premium locations, but planning regulations are often also restrictive in these areas. 

The wrap

Financial markets moved to price out any possibility of an interest rate hike in August on the lower than expected inflation figures, with interest rates set to be on hold for the time being.

Overall, this appeared to be a remarkably soft inflation result given the backdrop of the Iranian conflict, although perhaps there could be some more to come in terms of cost pressures.  

James Foster ran through the inflation figures in far greater detail here. 

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Vale Westpac's Bill Evans, a brilliant economist and career, of course, and also a down to earth fellow.

A sad day, bon voyage Bill. 

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

    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 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: Where prices are falling and where buyers can find opportunity

Property Podcast

Here is what Chris and I covered on the podcast this week:

"In this Australian Property Podcast episode, Pete Wargent and Chris Bates unpack what the post-Budget property reset is starting to look like on the ground, and where patient buyers may finally be getting some leverage again.

They break down quieter winter listings, soft auction clearance rates and the widening gap between A-grade properties and everything else. The big question is not just whether prices are falling, but where the pullback is creating genuine opportunity for upgraders, first-home buyers and investors willing to stay disciplined.

Pete and Chris also cover the pockets seeing the most change across Sydney, Melbourne, Brisbane, Adelaide and the Gold Coast, plus why units, renovators and better-quality homes may behave very differently from compromised stock. They also explain why lower borrowing costs alone may not be enough, and why quality listings could become the real battleground as spring stock arrives.

To wrap up, they answer listener questions on new builds, older Melbourne units and the tax headlines worrying Australian expats. 

If you are trying to read a softer market without getting swept up in the panic, this episode offers a practical look at what may matter next. It is a useful episode for anyone planning a move before the market narrative shifts again."

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 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.

Unemployment rate stayed at 4.4pc in June

Steady as she goes

After declining a little over the previous couple of months, the number of employed persons rebounded a strong +76,000 higher in June, driven by a +47,000 increase in part-time employment.

More persons than usual were waiting to start work in May, and then commenced work in June, reported the ABS.

This moved markets to price around a 1 in 3 chance of an interest rate hike in August.

The monthly jobs figures are absolutely all over the place, but looking through the monthly noise the 3-month average employment gain picked up again to a steady +27,000.

However, the result probably wasn't quite as strong as a it first looked.

The ABS noted an issue with its income rotation groups for New South Wales and Victoria, with several of the quality assurance tests throwing up results outside of the tolerance ranges, suggesting that the pop higher in monthly employment could easily reverse next month.

The seasonally adjusted unemployment rate also moved marginally higher from 4.37 per cent to 4.43 per cent.

The trend in unemployment rate remains gently higher, and further the unemployment rate of 4.4 per cent is a little higher than earlier Reserve Bank SOMP trajectory forecasts of 4.2 per cent.

By far the highest unemployment rate was seen in Victoria at 5.1 per cent - the highest since the COVID lockdowns - though it's possible that sample issues could've had an impact here too. Maybe. 

Moreover, the underutilisation rate has continued to move higher to the highest level since 2021, with the youth employment market looking particularly soft.

Ergo, this is not a tightening labour market.

Finally, the growth in the working age population over the year was a solid +402,200 or +1.8 per cent.

Overall, a super-strong headline result, which was tempered by the sampling issues and the ongoing increase in underutilisation.

James Foster ran through the figures in more detail 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 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.

Fixed rates fall

Fixed rates fall

The Treasurer set out a bigger emphasis on promoting growth in the latest Statement of Expectations for the financial regulators. 

New home sales fell in both May and June, adversely impacted by mortgage rates and low confidence after the Federal Budget. 

Source: HIA

In that context, it may be that the 3 percentage points lending assessment buffer is up for a review again, given that activity in the established housing market has also largely stalled. 

There have been some moves in lending products of late, in particular for fixed mortgage rates. 

Source: FirstMac

Edit: NAB also cut fixed mortgage rates this week:

Source: NAB

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I joined Juliette Saly on ausbiz TV to discuss all the latest market dynamics, including the impact of the ban of SMSF lending for residential property.

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 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: Property reset and rent pressure: what the budget could mean for buyers next

Australian Property Podcast

It's been an interesting week in property, so Chris and I jumped on the podcast to answer some of your pertinent questions and to add our thoughts. 

Here is what we covered this week:`

"In this episode of the Australian Property Podcast, Pete Wargent and Chris Bates unpack what the post-budget property reset may mean for buyers, renters and investors as the market heads deeper into winter.

The conversation starts with the big shift now showing up across the market: fewer active investors, tight rental supply and a growing sense that many buyers are sitting on their hands waiting for clarity. 

Pete and Chris explain why that matters, not just for house prices, but for rental affordability, construction activity and the number of listings likely to emerge in spring.

They also dig into the pressure points inside the market right now, including Sydney’s recent rent surge, fears that new supply will stall, and why some owner-occupiers may see the current anxiety as an opportunity to upgrade or renovate. 

Along the way, they discuss mortgage stress, first-home buyer hesitation, the slowdown in development feasibility and why tighter tax settings may push even more landlords to think about selling.

The episode wraps with listener questions on retirement planning, Sydney apartments, Airbnb strategy and whether borrowing inside super for residential property is effectively dead after the latest budget changes."

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

You can also watch the YouTube version 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 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.

Bits & pieces

News wrap

NAB's Business Survey for the June quarter confirmed that employment growth has stalled over recent months, as the Aussie economy runs out of puff.

Justin Fabo of Antipodean Macro overlayed the survey data on the below chart, underscoring the decelerating trend:

As such, the interest rate hiking cycle appears to be just about done, and we could be looking towards easing by 2027. 

Source: ASX

Separately, Roy Morgan's unemployment report survey showed the 'real' unemployment rate at the highest post-pandemic level we've seen to date, at 11.7 per cent.

Concerningly, employment also fell for a fourth straight month, noted Roy Morgan.

The official ABS Labour Force figures for the month of June 2026 will be released on Thursday next week.

Rental vacancies tight

SQM Research released its latest rental vacancies data, with a small seasonal increase recorded, and the national rental vacancy rate increasing a little from 1.2 per cent to 1.3 per cent.

The acid test for the rental market will come during the busier periods later in the year.

It's notable here that the one capital city which had been experiencing a reasonably balanced rental market - Melbourne - is now also tightening as interstate migration reverses back towards Victoria.

Five of the eight capital cities have extremely tight rental markets, with rental vacancy rates of under 1 per cent. 

---

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 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.

Rental listings are in decline

Rental trends

One of the more contentious issues in the housing market at the moment: will the Budget tax changes make the rental shortage worse or not?

Domain reported a huge leap in Sydney and Darwin rents in the June quarter, but that's only one data point. 

Cotality also reported last week that rents increased by 1.6 per cent in the June quarter, to be 41 per cent higher over the past five years. 

Listings in Sydney and Darwin were particularly tight, at about 25 per cent below their half-decade average.

Although that's an acceleration, to be fair this largely relates to pre-existing and pre-Budget trends.

Nerida Conisbee at Ray White put together an interesting chart on LinkedIn which shows how rental property listings have been falling in Sydney for around the past five years. 

Nerida uses rolling 12-month figures as the rental market is seasonal, and reports that the number of active rental listings has reached a 9-year low in Sydney:

Source: Nerida Conisbee, Ray White

You can see Nerida's full post here, where she argues that rental markets will tighten over the year ahead. 

It seems to me that rental markets tend to take quite a long time to reflect such directional changes in full, and it will be most likely 12 to 24 months before we really know the answers. 

---

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 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: 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:

---

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.