The Property Planner’s Monthly Market Update: July 2026
- Property Planning Australia
- Aug 11
- 5 min read
Welcome to the Property Planner’s Monthly Market Update, your comprehensive resource for the latest insights and trends in the real estate and economic landscape!
Stay informed and ahead of the curve with our expert analysis, helping you make well-informed decisions in the ever-evolving property market.
July Delivers the Sharpest Monthly Fall in Almost Three Years
National dwelling values fell 0.7% in July according to Cotality, the largest single month decline since December 2022, which is an annualised pace of 8.4%.
Sydney and Melbourne continue to lead the national decline, down 1.4% and 1.2% respectively for the month.
Brisbane and Adelaide have joined the downturn too, falling 0.6% and 0.2% respectively, with historical revisions confirming this is the second consecutive month of declines for both cities.
We think all capital cities will show falling values in the next month or two, once the data lag starts to flow through on Cotality's index.
The Data Providers Are Quietly Rewriting the Story
July's data revealed steeper declines across May and June than first reported.
Perth is the standout example, with June growth revised 120 basis points lower in the latest update, which is a negative 14% annualised difference in the data for Perth.
Well and truly enough to pull what was recently a booming market into negative territory.
It's a timely reminder that on the ground conditions are moving faster than the headline numbers suggest, and the official figures often catch-up weeks or months later.
Regional Markets Record Their First Decline Since Early 2023
The combined regional index fell 0.2% in July, the first decline in this measure since January 2023.
Regional NSW recorded the weakest outcome down 0.4%, followed by regional Victoria and regional Queensland both down 0.3%.
Regional SA and regional WA are bucking the trend entirely, up 1.4% and 0.9% respectively for the month, but we think these markets will turn over into negative territory on paper before long.
Total Listings Are Rising as Buyer Demand Dries Up
Nationally, total listings sit 0.1% above the five-year average over the four weeks to 9 August, a big turnaround from 25.9% below average back in mid-January.
Watch this number continue to grow as investors largely stay sitting on their hands, because the government didn't think through the second and third order effects of their taxation changes.
New Listings Fall Because Who Wants to Sell in this Market?
The recovery in total listings is not being driven by a flood of new stock coming to market, with new listings currently sit 7.1% below the five-year average.
Cotality has observed a deterioration in the flow of new listings across the country in recent weeks, led by Sydney, as vendors choose to wait until conditions improve.
Instead, total listings are climbing because properties already on the market are taking longer to sell and stacking up unsold.
Auction Clearance Rates Remain Very Low
Capital city auction clearance rates have remained below 50% since late May, though they have lifted from the low 40s in mid to late June.
Rents Keep Climbing, Even as Values Fall
National rents rose 0.4% in July on a seasonally adjusted basis, a touch softer than the 0.5 to 0.6% pace of recent months.
Annual rental growth has held at 5.9% for the third straight month, well above both inflation and wage growth.
That's the equivalent of adding around $40 a week to the median rent over the past year.
Rental affordability is already stretched, with households paying a record share of their income to rent in the March quarter.
Gross Rental Yields Hit Their Highest Level Since 2019 As We Predicted (and this is only the beginning)
With rents rising and values softening, gross rental yields are climbing quickly.
Across the combined capitals, the gross rental yields for the combined capitals reached 3.56% in July, the highest rate since August 2019.
How high do yields need to climb before investors come back?
The RBA Holds, But Another Hike Is Still on the Table, While the Big Four Banks Think the Next Move is Down!
The RBA left the cash rate on hold at 4.35% this month, a unanimous decision from the board.
Governor Bullock was clear that inflation is still too high and that another rate rise remains firmly possible if upside risks materialise.
Market pricing reflects that uncertainty, with a 54% implied chance of a hike by December and a 70% chance by March next year.
Interestingly, the big four bank economists are still tipping the next move to be a cut, though not until the back half of 2027.
Our view is that the tax changes will impact the broader economy more negatively than the government and most people think.
This will stifle spending and make the need for another rate rise unnecessary, at least until the property market turns or the policy changes are wound back.
Productivity, Not Rates, May Be the Bigger Problem
Australia's construction industry has been the worst performing sector for productivity by a significant margin for three decades, an estimated $62 billion drag on the economy each year.
Productivity in construction has risen just 17% since 1994, compared to 64% across the broader market sector.
At a time when the country desperately needs more homes, construction workers are increasingly being pulled toward government infrastructure projects and the booming data centre sector instead.
It's a structural issue that is likely to keep a floor under prices in the medium term, even as the market softens now.
Thanks to the tax changes, the property market is currently in decline.
With property values falling, developers have less incentive to build, because it's harder to turn a profit.
Build costs remain too high, driven by taxes, bureaucracy and a shortage of skilled trades.
We also refuse to bring in skilled labour from overseas to help ease that shortage.
These are all supply side issues, and the tax changes have made them worse in the very area they were meant to help.
The tax changes incentivise investors to buy new property, but that does nothing to grow supply if it's too unprofitable for builders to build it in the first place.
Want to learn more? Listen to the Property Trio Podcast
Reach Out to Us
If you would like to discuss your next steps, property plans, and mortgage strategy, get in touch with us today. Our team of experts is here to guide you through the complexities of the market and help you achieve your property goals.
