Read the September Month in Review.
When the Reserve Bank held the cash rate at 4.35 per cent in August, it was careful to call the decision a breather rather than a turning point, and the data since has borne that out. Headline inflation is running at 3.5 per cent and underlying inflation at 3.6 per cent, both stronger than expected and both well outside the target band, while the June quarter national accounts showed the economy growing faster than the RBA itself had forecast only weeks earlier. Add productivity that has been essentially flat for a decade, and you can see why every major bank expects the Board to raise rates again on 29 September.
Overseas, the Middle East remains unresolved, keeping energy prices volatile and a question mark over the inflation outlook.
All this weighs on domestic confidence generally, and on property markets specifically. For a market already facing headwinds, the federal budget delivered in May this year appears to have been the final straw.
Cotality reports national dwelling values fell 3.1 per cent over the three months to August, with every capital except Darwin declining. Sales volumes are down 14.6 per cent on a year ago, total listings are up 18.1 per cent, and the median time on market has stretched from 28 to 39 days. Buyers have more choice and less urgency, vendors are discounting harder, and our own Prestige Index has now shed 15 points since February. This is a broadening downturn.
Against that backdrop, our residential commentary this month turns to vacant land. The federal budget’s tax changes were sold in part as a supply measure, steering investors away from established housing and toward new builds. If that’s working, vacant land and house-and-land packages are where it should show up first. What our valuers report is that local markets are performing at various speeds. Perth remains chronically undersupplied, with resales in its south-eastern corridor showing substantial gains, while Darwin’s grant-fuelled momentum is constrained only by builder capacity. South-east Queensland has cooled since May, with lot prices in many locations now above $500,000 and with build costs on top, a new house-and-land package sits beyond the financial reach of many first homebuyers. Melbourne’s estates are offering rebates of up to 20 per cent to move stock, and in South Australia the bottleneck is water, sewer and services rather than planning.
The uncomfortable possibility residential director Jarrod Harper raises in this month’s overview is that policy settings may actually push investors into direct competition with the first homebuyers they were meant to help.
Our commercial specialists look at entry-level retail this month, a segment largely ignored by institutions but a natural landing point for private capital exiting residential, since the negative gearing changes don’t touch commercial property. Yields of 5.5 to 6.5 per cent look attractive on paper, but our teams warn that undisclosed levies and vacancy risk can erode them quickly.
Our rural section examines horticulture, where exports reached a record $3.5 billion in 2025/26, and growers are successfully diversifying beyond China, yet rising input costs and thinner returns have left fewer significant assets changing hands.
As always, it’s the ground-level intelligence of our national network that makes sense of these forces. Please enjoy our September edition of Month in Review.
Peter Maloney
CEO
Herron Todd White