August 2026 Australian Property Month in Review

Every so often, anecdotes and data finally meet, and in this market cycle, August is that moment.

On 11 August, the Reserve Bank held the cash rate at 4.35 per cent for a second consecutive meeting. Before anyone reads that as the peak, the Bank’s own forecasts assume one more increase is more likely than not, with inflation back inside the target band late next year. Rates are the highest they have been since late 2011, and the working assumption is that they’re likely to stay there for a while yet.

The market has responded accordingly. National dwelling values fell 0.7 per cent over the month and 1.9 per cent across the quarter to the end of July. In both cases, these are the largest declines since December 2022. Sales volumes over that quarter are also well down from a year ago. Total listings have reached their highest level since 2020. In addition, median time on market has stretched to 44 days from 27, and the typical vendor is now discounting by the largest concession since May 2023.

Tracking that discounting figure will be crucial over the next few months. Listings are climbing into spring against subdued demand. Many properties simply will not sell, and for most of the rest the only path to a contract is a price cut. Vendors anchored to 2025 expectations will likely trail 2026 realities, and it could cost some dearly.

Policy is compounding the picture. The budget’s negative gearing and capital gains tax changes have clearly deepened a slowdown already underway in some centres, and the ban on new limited recourse borrowing arrangements for residential property inside self-managed super funds has closed a funding channel for many investors. Building completions sit well below target, with the RBA Governor noting that data centre and infrastructure work is drawing trades away from house construction.

Our Prestige Index tells the same story at the top end, easing to 53 from 58, its largest single-month fall since launch, with Brisbane and the Gold Coast the movers.

Against that backdrop, our residential section addresses property renovation options across the country. The reasons owners improve rather than move remain largely unchanged, but the arithmetic has shifted. Materials shortages have eased but building product prices have continued rising. The CGT changes have also made renovating to flip far less attractive outside a principal place of residence.

Our commercial specialists examine industrial, still the market’s steadiest sector. First-half take-up of industrial space has been strong, and vacancies have stabilised between three and 4.5 per cent. Scarcity of serviced land continues to push land values up.

Our rural teams report on grain cropping, where a clear regional divide has opened up. Western Australia and Victoria are set for strong results, and the north of New South Wales has recovered on useful winter rain, while the south needs a kind finish to the year. The mid-June El Niño declaration makes spring a crucial period for the industry.

As always, our valuers on the ground turn these macro forces into intelligence you can act on. Please enjoy our August edition of Month in Review.

Peter Maloney
CEO
Herron Todd White