There was a lot of important economic and property data published over the past week. We saw the latest reads on consumer sentiment, vacancy rates, building activity, internet job vacancies, the latest labour force insights, construction costs and preliminary auction clearance rates.
There are currently no major releases scheduled for next week but I’ll keep an eye on things and let you know if anything relevant is published.
For now, let’s take a look at all the new data from the past week.
Westpac-Melbourne Institute Consumer Sentiment Index July 2025
Key insights
The Consumer Sentiment Index was recorded at 93.1 points in July 25 up from 92.6 points in June 25, still in pessimistic territory but trending closer to optimistic (above 100 points)
The survey was undertaken over the week of the RBA’s rate decision and the index was 95.6 points amongst those surveyed before the decision and 92 points after the rate decision.
Over the month the component indexes of family finances compared to a year ago, family finances over the next 12 months and economic conditions over the next year all increased while economic conditions over the next five year and time to buy a major household dwelling fell.
Both the Time to Buy a Dwelling Index (-5.1%) and House Price Expectations Index (-2.2%) fell over the month but at a value of 88.5 points and 162.8 points respectively respondents clearly don’t think it is time to buy a dwelling but fully expect prices to rise and do so quite strongly.
What does it mean?
This data indicates that many people were anticipating interest rate cuts and there was a sense of disappointment when those cuts didn’t come to fruition. The good news is that we are likely to get several further reductions in interest rates over the coming months providing mortgage cost relief for borrowers and increasing borrowing capacity for purchasers. Most people don’t think it is a great time to buy but expect prices to rise. I think this really highlights how expensive housing is but also the fact that as interest rates fall people expect property prices to rise despite these affordability challenges. If the market believes this will be the case, there is a bit of an inevitability that this will be the outcome.
SQM Research National Vacancy Rates June 2025
Key insights
The national rental vacancy remained low in June 2025 but rose from 1.2% in May 25 to 1.3% in June 25 which is the same vacancy rate as was recorded 12 months earlier.
Vacancy rates remain well below normal levels maintaining challenging conditions for renters trying to secure a new property.
There were increases in rental vacancy rates over the month in Sydney (1.5% vs 1.6%), Melbourne (1.7% vs 1.8%), Perth (0.7% vs 0.8%), while in all other cities vacancy rates were unchanged recorded at 0.9% in Brisbane, 0.8% in Adelaide, 0.6% in Hobart, 0.5% in Darwin and 1.5% in Canberra.
What does it mean?
Although there was a slight increase in the rental vacancy rate over the month the vacancy rate remains historically at low levels making it very challenging for renters trying to secure new properties. The low level of new housing supply and the fact that most of the new units being built are targeted at owner-occupiers means that whilst the population is growing necessitating more rental housing, the supply of rental housing isn’t growing in line with that population growth. Given this, I expect we are likely to continue to see low vacancy rates the challenge for many renters and landlords is the capacity for people to continue to pay higher rents.
ABS Building Activity March 2025 quarter
Key insights
Over the March 25 quarter there were 47,675 new dwelling commencements nationally which was +11.8% over the quarter, +17.3% over the year and the highest quarterly volume since the March 22 quarter
Dwelling completions reached 43,517 over the quarter which was -4.4% over the quarter and +3.7% over the year.
At the end of the March 24 quarter there were 219,883 dwellings under construction nationally which was +3.4% over the quarter but -2.9% over the year.
There were 33,254 dwellings units approved but not yet commenced at the end of the quarter which was -3.9% compared to the previous quarter and -3.3% compared to the same quarter last year.
What does it mean?
Dwelling commencements and completions are starting to trend higher which is good news given the dire need for additional housing. As interest rates fall and construction cost escalations moderate I would expect commencements and completions continue to lift. In saying this both commencements and completions are well behind the requisite number to achieve the Housing Accord target. A target which quite frankly won’t be met despite an expected uplift in new housing construction.
Jobs and Skills Australia Internet Vacancy Index June 2025
Key insights
The number of jobs advertised online in June 25 reached 213,135 which was +1.9% over the month, -6.7% over the year, -30.2% from the peak but still +27.2% compared to the start of 2020 and remains at an elevated level.
Advertised jobs are divided into 5 skill levels, with level 5 needing the lowest skills and level 1 needing the highest (bachelor degree or higher). Skill level 1 accounted for 37.2% of all job advertisements which was the highest while skill level 5 accounted for 10.9% (the fewest).
Across the states and territories the annual changes in advertised jobs were: NSW (-10.9%), Vic (-18.7%), Qld (-7.9%), SA (-3.3%), WA (-12.7%), Tas (-27.6%), NT (-11.3%) and ACT (-24.8%).
What does it mean?
Although job vacancies have trended lower over the past few years they rose slightly over the month and remain much higher than they were pre-pandemic. This highlights that many employers are still trying to fill roles and finding doing so challenging. With the labour market weakening over recent months it will be interesting to monitor this data. A weaker labour market could also have repercussions for the willingness of the public to take on debt for housing.
ABS Labour Force Data June 2025
Key insights
Total employment increased by only around 2,000 persons over the month while unemployment increase by 33,600 persons while the employment participation rate rose from 67% to 67.1%.
As a result, the unemployment rate and the under employment rates increased from, 4.1% to 4.3% and from 5.9% to 6%, with the unemployment rate rising to its highest rate since November 21.
Job creation is still occurring but has stalled over the first half of this year with employment increasing by 90,736 persons over the first six month of 2025, compared to growth of 195,573 persons over the previous six months.
What does it mean?
The labour market appears to be weakening and it looks like the RBA’s decision to hold interest rates this month was incorrect based on this data. Job creation has stalled and the unemployment rate at 4.3% is now higher than the latest RBA forecasts for June 25 which were 4.2%. While these statistics can be a little noisy there is a clear slowing of job creation. If job prospects are not as strong and people are losing jobs and finding it harder to find replacement employment, or they are worried about their job security, this has the potential to weigh on housing demand and make would-be purchasers less inclined to transact. The labour force data is definitely one to keep an eye on.
Cotality Cordell Construction Cost Index June 2025 quarter
Key insights
Residential construction costs were +0.5% over the June 25 quarter, up from a +0.4% change over the March 25 quarter.
The annual increase in residential construction costs over the June 25 quarter was +2.9% which was a step-up from the +2.6% annual change in June 24.
Although quarterly construction cost growth accelerated it remains below the pre-pandemic decade average rate of growth of +1%.
What does it mean?
After a substantial surge in construction costs through the pandemic, the rate of cost growth has slowed however, the step up in growth over the quarter and annual growth over the year is something to monitor. High construction costs remain a significant barrier to delivering the volume of housing required and any further or ongoing acceleration of cost growth will be damaging to the new housing sector.
Cotality Preliminary Auction Clearance Rates week ended 20 July 2025
Key insights
The preliminary auction clearance rate across the combined capital cities was recorded at 74.4% which was the second-highest preliminary rate of the year and higher than the 72.2% the previous week.
There were 1,574 capital city auctions over the week, up from 1,432 the previous week but it was still fewer than the 1,777 auctions the same week last year.
Across the major auction markets, preliminary clearance rates over the week compared to the previous week were: Sydney (74.8% vs 76.2%), Melbourne (76.7% vs 70.5%), Brisbane (68.4% vs 61.3%), Adelaide (71.7% vs 75.6%) and Canberra (65.8% vs 68%).
What does it mean?
It was another week of strong preliminary auction clearance rates on relatively strong volumes. This indicates strong demand for housing and with a further interest rate cut expected soon, I expect preliminary clearance rates will remains around these levels and will potentially strengthen as interest rate relief is delivered.
In case you missed it here are my posts from the past week.
