Home values fall 0.7% as the correction broadens

HousingHome values fall 0.7% as the correction broadens

National home values fell 0.7% in July, following downwardly revised falls of 0.7% in June and 0.5% in May. Prices are now 1.6% below their March peak.

• Annual growth has slowed to 5.3%, but the recent trend is far weaker. The quarterly decline is the largest since the 2022 correction, with prices tracking an annualised pace of contraction near 5.8%.
• The correction is broadening. Five of the eight capital cities recorded falls in July, and just under 70% of the fifty sub-markets covered declined over the three months to July, against 16% in the three months to March.
• Brisbane and Perth have shifted the most, swinging from solid gains in the first half of the year to declines running at a 2 to 4% annualised pace. Sydney and Melbourne continue to fall at a similar pace to recent months.
• Turnover is weakening materially. Preliminary estimates point to sales down around 5% over the quarter and close to 12% over the year, with Sydney and Melbourne down 18 to 20% and activity now below 2022 lows.
• New listings have softened by less, so the balance has tipped. Sales still exceed new listings nationally, but the gap has closed in Sydney and inverted in Melbourne. Perth has slipped below new listings for the first time since mid-2022.
• The drivers are clear enough: rate hikes in February, March and May, uncertainty around the Middle East conflict, and the housing tax changes announced in the May budget. Houses fell slightly more than units in July, with top-tier segments still leading the declines.

Consumer ConfidenceConfidence rises 3.5pts

TradeSurplus returns on gold and iron ore

• The goods trade balance swung to a $1.9bn surplus in June, a $4.3bn turnaround from May’s revised $2.4bn deficit and well ahead of the $1.1bn deficit expected. It is the largest surplus since February.
• Exports rose 9.6% in the month and 8.6% over the year. Non-monetary gold jumped 60% and did most of the work, with iron ore up 6.2%, coal 4.6% and LNG 4.0%.
• Imports slipped 0.2% but were up 8.1% over the quarter on fuel and motor vehicles. Data-centre equipment fell sharply, pointing to easing momentum in that build-out.
• Even so, the goods balance should detract about 0.5ppt from June-quarter growth, with import volumes far outpacing exports.

Foreign ExchangeAUD eases to US$0.70 as tensions resurface

• The Australian dollar eased to around US$0.70, pulling back from a seven-week high and on track to finish the week broadly unchanged as renewed Middle East tensions weighed on risk sentiment.
• The US dollar strengthened and oil prices climbed after reports of Iranian attacks in the Strait of Hormuz, with no clarity yet on an agreement to reopen the waterway. Higher energy prices have revived inflation concerns and reinforced expectations that global interest rates may need to stay higher for longer.
• At home, after three rate hikes this year, markets price virtually no chance of a move at next week’s RBA meeting following the softer-than-expected second-quarter inflation data. September is also seen as close to a non-event, though investors assign roughly a 60% probability of a hike in November if third-quarter inflation proves stronger than expected.
• That leaves the Aussie caught between a firmer US dollar and supportive commodity prices. Energy markets and the Q3 CPI print are the next catalysts for a decisive move.

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Sources: Cotality Home Value Index (July 2026), ABS International Trade in Goods (June 2026), Westpac Economics (Weekly, 7 August 2026), ANZ-Roy Morgan. This summary is for informational purposes only and should not be considered financial advice. Always consult a professional before making investment decisions.