Over the past week we’ve seen new data published on home values in Jun 25, national property listings, dwelling approvals, household spending, an analysis on properties being cheaper to buy or rent and preliminary auction clearance rates.
All eyes shift to the RBA next week as the Monetary Policy Board meets with many (myself included) expecting a reduction in the cash rate. I think it is pretty clear that inflation is now contained but the scarring from several years of high inflation is reverberating with low economic growth and households having reduced their spending. Another reduction in the cash rate appears completely necessary.
ICYMI I have had a few posts over the past week.
Let’s look at what happened over the past week.
Cotality Home Value Index June 2025
Key insights
National home values rose for the fifth consecutive month and were +0.6% in June to be +3.4% over the past year.
Capital city home values recorded a smaller increase of 2.7% over the year than the regional markets where values were 5.5% higher.
Of all the capital cities and rest of state areas, only Melbourne recorded a value fall over the year (-0.4%) while Canberra (+0.3%), regional Vic (+1%) and Sydney (+1.3%) saw the weakest growth and regional WA (+11.9%), regional SA (+11.6%), Adelaide (+8%) and both Brisbane and Perth (+7%) recorded the greatest value increases.
What does it mean?
I expect prices to continue to rise over the coming period as interest rates fall however, housing affordability is already extremely stretched due to the strong increases in home values over recent years. This should result in the uplift in values remaining much more curtailed than it has over recent years but expect the recent gains in home values to persist and perhaps strengthen a little.
SQM Research National Property Listings June 2025
Key insights
In June 25 there were 62,769 newly listed properties for sale nationally which was -9.1% over the month and -3.7% over the year.
Total property listings reached 234,067 in June 25 which was -8.8% over the month but +1% over the year. With stock levels remaining higher than recent years in Sydney, Melbourne, Hobart and Canberra and at low levels elsewhere.
Nationally, 77,018 listings were more than 180 days old which represents 32.9% of the total stock for sale. Throughout the capital cities, Hobart (41.7%), Darwin (33.4%), Melbourne (24.2%) and Canberra (21.3%) have the highest share of stock that is more than 180 days listed while Perth (10.9%), Brisbane (11%), Adelaide (14.1%) and Sydney (20.1%)
What does it mean?
New listings are moderating as we move to the seasonally quieter time of year but total listings remain higher than a year ago and remain elevated in certain markets while total listings are higher over the year in very tight markets like Adelaide and Perth. We continue to see heightened volumes of older stock in some market while the markets that are experiencing the strongest price growth have relatively little older stock and relatively total stock for sale. While prices are expected to continue to rise the relatively low stock levels in Brisbane, Adelaide and Perth are likely to see these markets continue to outperform (unless supply shifts quickly) despite their strong recent price increases.
ABS Building Approvals May 2025
Key insights
There were 15,212 dwellings approved for construction in May 2025 which was +3.2% over the month and +6.5% over the year. This took annual approvals to 182,894 which was +0.5% over the month, +10.9% over the year and the highest volume since May 23.
House approvals were recorded at 9,555 over the month taking them +0.1% over the month and +3.2% over the year and seeing annual approvals reach 112,354 which was +0.3% over the month, +6.9% over the year and the highest volume since February 23.
Other residential approvals were 5,657 over the month and were +9% higher than the previous month and +12.4% over the year. Annual approvals reached 70,541 which was +0.9% over the month, +17.7% over the year and the highest volume since May 23.
What does it mean?
While monthly approval numbers are notoriously volatile, annual numbers continue to climb which is the most important thing when trying to build more housing. Unfortunately, we need to build 240,000 new dwellings a year as per the Housing Accord and we are still far away from approving that volume (they have to be approved to be built). I expect approvals will continue to climb as interest rates fall and with construction costs stabilising, but we’re likely to fall a long way short of the Housing Accord target.
Domain Cheaper to Buy or Rent Analysis July 2025
Key insights
Assuming a mortgage rate of 5.68% and a 20% deposit on the median priced property, 6% of suburbs nationally are currently cheaper to buy a house in than to rent and 22.8% of suburbs are cheaper to buy than rent for units.
Just 1.7% of capital city suburbs are cheaper to buy than rent for houses and 20.7% for units while in regional Australia the figures are 14% of suburbs for houses and 31.3% for units.
Perth has the highest share of suburbs cheaper to buy than rent while Sydney and Brisbane have the fewest.
What does it mean?
Despite a strong surge in rental costs over recent years, property prices have typically risen by a larger amount and this combined with relatively higher interest rates means that in most instances it is still cheaper to rent than buy. The equation changes (and is rarely measured) if you buy somewhere other than where you are renting which we should always keep in mind. As interest rates fall it is likely we will see an increase in the share of suburbs cheaper to buy in than rent however, if property price growth accelerates as it often does when rates fall, the window of opportunity to leave your rental for a cheaper mortgage could be a narrow one.
ABS Monthly Household Spending Indicator May 2025
Key insights
Household spending in May 25 was $76.449 billion which was +0.9% over the month and +4.2% over the year, its strongest annual growth since December 24.
Spending on goods was +0.8% over the month and +1.5% over the year whilst spending on services was +0.9% over the month and +7.5% over the year, its strongest annual growth since December 23.
Discretionary spending was +1.1% over the month and +3.7% over the year and non-discretionary spending was +0.5% over the month and +5% over the year.
The categories that have seen the largest increase in spending over the year were health (+8.4%) and miscellaneous goods and services (+8.3%) while the weakest changes in spending were for alcoholic beverages and tobacco (-15.1%) and transport +1.7%.
What does it mean?
The household spending indicator saw relatively strong growth over the month, with its largest monthly increase since October 24. The rise was due to lifts in discretionary spending which may potentially signal to the RBA that households are easing their purse-strings which is what they are hoping for. Stronger household spending could reduce the need for interest rate cuts although inflation and the labour market will be key determinants of what happens with interest rates. For the housing market, an increased willingness to spend on goods and services could flow-through to an increased willingness to spend on housing.
Cotality Preliminary Auction Clearance Rates week ending 6 July 2025
Key insights
Preliminary auction clearance rates across the combined capital cities were recorded at 73.1% over the week, down from 74.5% the previous week.
The slip in the clearance rate happened on fewer auctions with volumes down to 1,786 this week from 2,044 the previous week.
Across the major auction markets clearance rates over the week compared to the previous week were: Sydney (72.5% vs 73.5%), Melbourne (75.5% vs 75.2%), Brisbane (70.8% vs 76.1%), Adelaide (65.7% vs 80.8%) and Canberra (73.1% vs 63.8%).
What does it mean?
The market is consistently seeing preliminary clearance rates at around 70% indicative of strong demand and a large volume of properties selling at auction. The next few weeks will be interesting to monitor, whilst we’re moving to a quieter time of the year an expected interest rate cut could lead to strong auction volumes and potential higher clearance rates. I will be monitoring this closely.