2026-08-17 Monday

Australia's housing market is set for a sharper slowdown than any external forecast has suggested, with the RBA's own scenario putting housing credit growth at 3.5% from 7.8% and prices 2-5% lower relative to no policy change. The internal analysis of the 2026/27 Budget's negative gearing and capital gains tax reforms, released under FOI, also projects a rise in firms' cost of capital by 11-26 basis points. The reforms are the single thread tying together the day's pieces: the RBA's deep dive into the tax changes, the latest housing data showing prices already cooling, and the credit figures pointing to a slowdown in lending. National seasonally adjusted housing prices fell 0.1% in May 2026, the lowest monthly growth since December 2022, though still 8.9% higher over the year. Sydney and Melbourne prices fell for a third consecutive month, by -1.0% and -0.9% respectively, while housing loan commitments dropped 4.9%, with investor commitments down 6.3%. The RBA's analysis suggests these trends will intensify, with Treasury's central estimate at 2% over two years. Advertised rents grew 0.5% in May, with year-ended growth around 6%, a counterpoint to the price weakness. The day's widely reported topics were absent, leaving the RBA's FOI release as the dominant story for private wealth managers.