Building approvals fell -3.6 per cent to a seasonally adjusted 17,687 in July.
House approvals were solid in Perth and Brisbane, and pretty steady elsewhere.
The one bright spot for attached dwelling approvals remains south-east Queensland.
Sydney looks set for an acute housing shortage as this cycle progresses, especially given insolvencies in the development sector.
Overall, this was a solid result, though whether all of the approvals turn into actual dwelling completions is a different story.
Over the past year, around 205,000 dwellings have been approved.
Since the introduction of the Housing Accord, building approvals are running about 20 per cent below the government's implied target of 20,000 per month.
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In other news, Cotality reported housing prices as down by -0.9 per cent in August.
Source: Cotality
The largest declines have generally been seen in the higher price points, with houses in Sydney seeing a year-to-date decline of -7.7 per cent, and houses in Melbourne down -7.5 per cent.
Cotality reported that new listings are running -8.2 per cent below the 5-year average, with new listings in Sydney -14 per cent below average.
Rents continued to rise, up by 0.4 per cent over the month and by 5.7 per cent over the year to August (and 39 per cent over the past 5 years).
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.
Been staying the Cotswolds for a few days - very nice too, but good to be back on deck.
Here's what we discussed in the podcast this week:
"In this episode of Australian Property Podcast, Pete Wargent and Chris Bates unpack whether spring will bring genuine opportunity for buyers or just more noise in a fragile market. It is a practical check-in on prices, listings, rents and borrowing conditions heading into the busiest stretch of the year.
They look at why recent headlines about green shoots may be getting ahead of the data, what weak auction depth and softer sentiment are telling us, and why a true rebound may still depend on interest-rate relief rather than wishful thinking. The conversation also covers falling investor participation, why transaction volumes can drop harder than prices, and how the better properties in a suburb can hold up differently from the median numbers making the news.
Pete and Chris then dig into the policy side: negative gearing changes, rent pressure, slowing new-home sales, and the possibility that stretched supply gets even tighter if developers and investors keep stepping back. They also discuss sharper bank pricing, the early signs of a mortgage war, and why many borrowers should be reviewing their rate rather than waiting for the market to improve.
To finish, they answer listener questions on stamp duty, the real cost of trading property, and whether 40-year mortgages could become more common. That includes why longer loan terms may ease monthly repayments without fixing affordability, and how future schemes could change the way first home buyers enter the market."
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 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.
