A question hanging over Australia’s property markets of late has been when the year’s accumulating pressures will impact the real estate landscape. The latest data shows that time is now.
On 17 June, the Reserve Bank held the cash rate steady at 4.35 per cent, its first pause after three consecutive rises this year. The Board was careful to signal this is a pause, not a pivot, flagging its focus on stopping this year’s inflation spike from becoming embedded. The next decision lands 11 August, and with the cash rate not expected to fall until well into 2027, most borrowers aren’t relying on relief arriving quickly.
Also, in recent weeks, the budget reforms passed both houses of Parliament and received Royal Assent. The negative gearing and capital gains tax changes are now law, replacing the 50 per cent CGT discount with cost-based indexation and a 30 per cent minimum tax rate from 1 July 2027, and quarantining negative gearing benefits to new builds for properties acquired after Budget night.
Buried in the same bill, agreed as the price of Greens support in the Senate, is a ban on new limited recourse borrowing arrangements (LRBA) for residential property inside self-managed super funds. That ban takes effect on 10 August, giving trustees a narrow window to complete if they were partway through a purchase. Commentators have flagged that for SMSF LRBA, the trustees using them tend to be ordinary Australians with modest balances rather than the well-heeled investors the policy appeared to be aimed at.
Then there’s the Middle East. The fragile ceasefire has well and truly broken. A tanker attack in the Strait of Hormuz in mid-July triggered fresh US strikes before both sides stepped back in. Oil settled well below its April peak but is now trading with real volatility, keeping a question mark over the inflation outlook the RBA is monitoring.
Locally, the effects are visible in the data. Sydney’s auction clearance rate slipped below 50 per cent through June and July, against the mid-to-high 60s recorded a year ago, and our own Prestige Index has eased for a fourth straight month. This isn’t a market in retreat so much as one recalibrating at different speeds in different places, which is exactly the story our July edition tells.
Our residential section takes a national view of just how segmented the market has become, tracking the divergence between resilient undersupplied centres and the more cautious eastern seaboard capitals as investor settings shift. On the commercial side, our specialists turn to the office sector, where the split between premium, amenity-rich towers and older secondary stock has rarely been starker. And our rural teams report from the livestock and grazing sector, where a widespread autumn and winter seasonal break has restored confidence even as producers navigate the flow-on effects of global disruption.
As always, it’s the ground-level intelligence from our valuers across the country that turns these macro forces into something genuinely useful for the decisions you need to make.
Please enjoy our July edition of Month in Review.
Peter Maloney
CEO
Herron Todd White
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