Biz survey pressures ease
NAB's business survey showed business confidence still mired in hugely negative territory at an improving reading of -14, with business conditions steady at +3.
Interestingly, and perhaps a bit surprisingly, cost pressures eased quite significantly in May, following the spike in April related to the Iranian conflict.
Although cost pressures do remain elevated, maybe this represents some early signs of demand destruction.
Source: NAB
Margin pressures are persisting for businesses, while the ongoing downtrend in capacity utilisation points to an ensuing slowdown in economic growth in the second half of 2026.
Both NAB and the the Commonwealth Bank of Australia now see the next move in interest rates as being down, although the timing is uncertain.
Dwelling values rise towards $13 trillion
Before the Budget, the total value of Australia's dwelling stock rose by 2½ per cent or $316 billion in the March 2026 quarter to a total value of $12.8 trillion.
Since values last fell in September 2022, the total value of housing stock has increased by $3 trillion.
You can read the ABS report here.
Of course, this is somewhat old news given that Sydney and Melbourne have been in a downturn for some time now, and because it's been also a month since the Federal Budget was handed down, with its significant proposed changes to tax legislation.
Asking prices for houses nationally are now down -0.7 per cent over the past quarter according to SQM Research's indices (for units asking prices have continued to rise for now, up by 0.7 per cent over the month, and 1.8 per cent over the quarter).
Source: SQM Research
Shane Oliver of AMP calculated that rental yields would quickly reset higher - rather than the market seeing a protracted or drawn-out downturn - with prices projected to fall -5 per cent overall while rents rise, and on this evidence he may well be right.
Treasury had previously predicted that the tax changes would see housing price growth as -2 per cent lower than would otherwise had been the case over two years, albeit it's arguably doubtful that anyone truly believed in such a benign calculation.
Macquarie Bank also projects housing turnover to fall by -20 per cent, with nominal housing prices to fall by -5 per cent in this cycle.
It seems to be occurring pretty quickly according to these figures.
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