Investment Report – July 2026

Australia’s housing market has transitioned into a widespread moderation phase, with broad-based price growth giving way to cooling momentum. The performance gap remains evident, but the national growth trajectory is noticeably compressing.

Perth remains the strongest annual performer at 24%, though this has eased from its recent peak. Brisbane has slowed more sharply to 16%, while Adelaide holds steady at 12%. Conversely, the eastern states have hit critical turning points; Sydney’s annual growth has flatlined to approximately zero, while Melbourne has officially slipped into negative annual growth at a city-wide level – though select outperforming suburbs continue to buck the trend.

Rental markets remain historically tight, but the tightening cycle appears largely complete as vacancy rates edge up slightly in Sydney, Melbourne, and Perth. On the macroeconomic front, headline inflation dipped to 4.0% due to temporary fuel excise relief, while core trimmed-mean inflation ticked up to 3.6% alongside a drop in unemployment to 4.4%.

With interest rates finely balanced and changes to negative gearing and the CGT discount now officially legislated, investor lending reveals diverging trends. In this new landscape, capital is actively shifting away from high-leverage shortfalls towards lower-priced dwellings and markets offering defensive cash-flow sustainability.