Investment Report – June 2026

Australia’s housing market divergence has intensified through May. The performance gap remains wide, though monthly momentum is now moderating across high-growth markets as affordability constraints take hold.

Perth continues to lead the capital cities with annual growth at 26%, though its rapid monthly acceleration has slowed since March. Brisbane and Adelaide show signs of stabilising at 18% and 12% annual growth respectively. Meanwhile, the eastern states have weakened further; Sydney’s annual growth has slowed to approximately 2% on sustained monthly price declines, while Melbourne has eased to effectively zero—offering potential counter-cyclical value over the medium term.

Rental conditions remain constrained but are showing signs of stabilisation rather than further tightening, with vacancy rates edging up slightly in Sydney and Melbourne. The macroeconomic landscape has shifted subtly, with headline inflation dropping to 4.2% due to temporary fuel excise cuts, while unemployment rose to 4.5%.

With the cash rate steady at 4.35% and proposed tax changes creating headwinds, newly released ABS lending data reveals a clear moderation in investor activity. In this environment, target selection is paramount as capital pivots towards lower leverage and defensive cash flows.