# Rising Costs, Slowing Growth and Housing Shortages | Wilson Monthly Market Update EP 6 June

An episode of [Money Mentor Podcast™](https://invisiblenetwork.ai/podcast/1632604767), 20 Jun 2026, 52 min.

Audio: https://episode.flightcast.com/fi01j7k5c6kllr42apa76gc6.mp3

In this month's Wilson Monthly Podcast, Rachael Howlett sits down with Dr Andrew Wilson to unpack the latest developments shaping Australia's property market. With the RBA holding interest rates steady after a series of hikes, Andrew explores what persistent inflation, rising electricity costs and a softening labour market could mean for homeowners, investors and buyers.The pair also discuss the ongoing shortfall in new housing supply, the latest capital city price movements, rental market trends and where opportunities may emerge as economic conditions continue to shift. If you're looking to understand what's next for Australian property in 2026, this episode delivers the insights you need. Money Mentor YouTube Channel: @moneymentorau Dr Andrew Wilson on LinkedIn: /dr-andrew If you enjoyed our podcast, make sure you follow and subscribe to stay up to date with the latest episodes. 👉 Follow the link https://bit.ly/43V2jKN to watch the free webinar and start your Infinity journey now!

## Transcript

[0:05] Welcome back to the Wilson Monthly Market Update.
[0:07] And boy, do we have a lot to talk about.
[0:10] The market has definitely changed from when we did our podcast last month.
[0:15] Definitely a hot topic will be the rate hold, which Doc and I were definitely expecting.
[0:21] Lots to talk about around the Fuel Peace Treaty as well that has been signed and where the market is currently headed.
[0:26] So let's crack straight into it, Doc.
[0:28] How are we?
[0:29] Yeah, good.
[0:30] Happy winter, of course, because we are in winter.
[0:32] This is our early winter show, isn't it?
[0:36] And look, winter is usually the quiet period for the housing market or the beginning of the distracted part of the market.
[0:42] You know, July, the middle of the year.
[0:44] Everybody who's got lots of money heads to Europe or the US, right, because they want to get out of the Australian winter.
[0:51] So we normally get less activity, distracted buyers and sellers through the winter markets starting in maybe the middle of June and working its way through July and into early August and then we have our usual revival.
[1:06] So in a way it's come a little early this year.
[1:08] Well, it's going to be interesting too because we've had the budget announcements right before our winter period.
[1:13] So that's also going to have a bit more of an effect on that time as well.
[1:16] Yeah.
[1:17] So in terms of the market, I actually think that's a good thing.
[1:20] Yeah, I agree.
[1:20] Because it starts a little early, the winter market.
[1:23] People then still become distracted, but they're not as engaged in all the doom and gloom, obviously, that's been generated through autumn, as you mentioned, the budget.
[1:33] As well, we were sort of getting to the end of the housing or the house price cycle, because house prices do move in a cycle.
[1:41] Yeah.
[1:41] And we've had three very strong years of growth.
[1:44] Last year was a boom time in many of our capital city markets.
[1:49] So you sort of get to the point where you just can't keep going to the bank manager and saying, can I have another $100,000, you know, to buy?
[1:56] Well, yeah, sure, but are you earning more income?
[2:00] Well, no.
[2:01] Can you give me an interest rate reduction?
[2:04] No, we can't do that.
[2:05] Not until the RBI.
[2:07] Well, that's right.
[2:08] We can't because our rates are fixed, blah, blah, blah.
[2:10] So it means that the affordability barriers start to merge or start to become a factor.
[2:18] And that's the biggest problem, right?
[2:19] This budget was supposed to announce we're going to help first home buyers, but that's what we're not talking about is the affordability barriers.
[2:27] Look, we all are sympathetic to first-home buyers, but affordability really – I mean, first-home buyers can never really afford to get into the market, can they?
[2:35] Yeah.
[2:36] That's the problem.
[2:36] I mean, that's why it's such a – they have such a strong aspiration –
[2:41] to become homeowners because it's a tough, it's a tough ask, you know, as we all know.
[2:46] But it's really the rest of the market which is about affordability.
[2:50] And when we look at the big picture, Australia's market, I mean, everybody says, yes, look, prices are high and they keep rising and –
[2:59] But the whole point is affordability is not the issue because if you can't afford to buy a property, you can't buy a property because the banks won't allow you to.
[3:07] And the reason we can see that is – or we can sort of say that is because when we look at the default numbers and the arrears numbers, they're at record lows and they're consistently there because the banks keep a very tight hold.
[3:22] Well, they forget about the regulation our banks have to avoid that as much as possible.
[3:26] So if anything, they're over-managed.
[3:28] Yeah.
[3:29] They're more risk-averse than they should be, but that's because there's only four of them.
[3:34] Yeah.
[3:34] So they don't have to take risks.
[3:35] Do you think we're over-regulated?
[3:37] I think we are to some degree in terms of risk.
[3:40] But if over-regulating risk means that we keep... Strong property market.
[3:45] We keep a strong property market through the cycles.
[3:47] And that's my whole point.
[3:49] So we do get to the point where affordability becomes an issue, but that's only because we can't keep pushing our prices because we haven't got the factors...
[3:58] to enable us to do that, which is either higher incomes or lower interest rates.
[4:03] So these issues that we've had through autumn, which have impacted affordability, which of course is higher interest rates, which always impact affordability, of course, because, you know, we've got to pay more with a given income for our mortgage, right, because the interest rates are higher.
[4:21] So that takes buyers out of the market.
[4:23] And the other thing that's taken buyers out of the market is they're bought, you know,
[4:27] I mean, you don't buy a house every year.
[4:31] Of course, you know, transaction costs are high and typically people stay in a house around about six or seven years or a unit, right?
[4:38] So, you know, people have bought, move on, right?
[4:41] Well, let's say mortgage demand at the moment with the latest starter is down 6.6% with first home buyer demand down 9.1%.
[4:48] So there definitely is a bit of a sit back and wait and see what happens.
[4:52] But I know we've always been saying that these are the times where this is opportunity time.
[4:56] Absolutely.
[4:57] Yeah.
[4:57] And when we look at the charts, that shows us that.
[5:01] And in a way, the best time to buy, all things being equal, unless you can find the property, is actually winter.
[5:08] Yeah.
[5:09] Because winter has the highest proportion of non-discretionary buyers or sellers, sorry, in the market.
[5:15] So a non-discretionary seller is someone who has to sell.
[5:17] Yeah.
[5:17] Right?
[5:18] They're moved.
[5:19] They've got another job.
[5:20] Unfortunately, they might have got divorced.
[5:23] There might have been a death involved there.
[5:26] So they're non-discretionary sellers.
[5:29] So you have a better chance because they can't sit in the market for a long period.
[5:33] So buyers can use that to their advantage.
[5:35] Yeah.
[5:35] So that's what winter is.
[5:36] So if you've got a heightened winter market now, which we sort of have with those other factors...
[5:42] Again, because it's a heightened winter market because people are nervous because of the negativity and all the commentary that's going around.
[5:50] So you actually, if you're savvy enough to perhaps understand that this is a cycle and that it will revive, as it always has in Australian housing markets…
[6:00] that these are the opportunities to take advantage of, you know, of those non-discretionary sellers or the sellers who have become nervous and have bought into the doom and gloom, think I better sell now because prices are going to be lower.
[6:14] And we see that all the way through the cycles.
[6:16] And the point is that by the time we get to the spring selling season, which is usually and typically the strongest part of the year, a lot of that will be forgotten, you know, the –
[6:29] The negativity in terms of inflation has certainly dissipated now, early days.
[6:36] But we do have, as you said, a signed peace treaty between Iran and the US.
[6:42] We've got like nearly 200 tankers, I think, full of oil that have just been sort of sitting there waiting to find the opportunity to deliver that oil on their way.
[6:52] And of course, that means that shortages will be overcome.
[6:55] In fact, if anything, we'll have a glut on.
[6:58] going forward.
[6:59] So the outlook for- Because we'd be watching the fuel excise cut that we had from- Well, we were just talking about how the budget announced we're going to extend that for another three months.
[7:07] They'd done it a little bit prior.
[7:09] So that was something we'd be looking at for the inflationary numbers.
[7:12] What happens from 1st of July when that's no more?
[7:15] That's right.
[7:15] But now it's not going to be so much of an issue.
[7:18] And I think, as you've said, that it really hasn't had that impact.
[7:22] No.
[7:22] Because the government early days...
[7:25] They actioned it quite quick.
[7:26] Yeah, which meant that we really haven't felt the impact of those higher oil prices, particularly at the point where they'd be passed on through industry to higher prices and therefore higher inflation, and that was the big fear and the...
[7:42] So you think we caught it early enough to not impact inflation?
[7:45] Yes.
[7:45] That's good.
[7:46] Yes.
[7:46] And now we've got, you know, back to normal.
[7:50] And I think the fact that there was so much oil just waiting to be delivered means that there'll be a shorter term before we actually get maybe even lower oil prices.
[7:59] I mean, the price of oil, and we'll have a look at a slide shortly, is now down.
[8:03] It looks like it's going to get under $70 US a barrel.
[8:06] Yeah, wow.
[8:07] which is sort of where we were at the beginning of the year before this all started.
[8:12] So the way things work, you know, it'll take some time for that to actually adjust its way into inflation because we look at year on year.
[8:19] But it certainly will take a lot of the negativity out of it.
[8:22] And maybe also those that might have taken advantage of the, you know, the conversation around, oh, higher oil prices are going to mean higher inflation.
[8:31] And, you know,
[8:31] and raise their prices regardless.
[8:34] And this is always a risk that can happen.
[8:37] So I think we've caught it, as you said, early enough to not to have those sort of second round inflationary effects coming through, which the Reserve Bank was...
[8:47] was frightened about.
[8:48] And look, they still made note of that, that they weren't still obviously happy with inflation and where it was headed.
[8:56] So don't completely discount that there may be higher interest rates.
[9:04] Yeah, well, they're still saying with a bit of hesitancy, oh, we've held it now, but we're not ruling it out for the future.
[9:09] It almost seems like they're wanting to preempt that they don't want to get in trouble by saying something today that might change in a month.
[9:15] Yeah, and I think there's a bit of that because, you know, it did look a bit funny last year when we had those three interest rate cuts.
[9:23] Inflation really wasn't under control.
[9:27] Hadn't even met the guidelines the Reserve Bank had said.
[9:30] And then we had to sort of reverse all that with interest rate rises this year.
[9:35] But the first rise came because we had a rise in February, March and May.
[9:41] And the first rise came before the oil issues emerged.
[9:44] Yeah.
[9:45] So it was, you know, a little bit of like maybe we've got to make up for those cuts we had last year because inflation was still above their target range.
[9:53] And they realise they're a bit premature in giving us those.
[9:57] So I think this month is a much better storyline in terms of positivity on all the factors.
[10:03] We obviously have water to go under the bridge.
[10:07] Winter is coming up.
[10:08] So are you going to Europe for holidays this year, Rachel?
[10:12] Well, I'm just saying those that can do.
[10:13] But you've got to say winter is coming in your best Game of Thrones voice.
[10:18] Well, you know, there's always the Gold Coast, isn't there?
[10:20] Who needs Europe?
[10:22] But at the end of the day, it sort of just sort of works its way into the prospect of still having a revival, I think, coming into the August market because maybe by then we wouldn't have had, you know, we've had time to digest the negativity and to sort of start to understand that it's not as bad as many have made out it to be.
[10:42] Yeah.
[10:43] And that this is just a natural part of the housing market cycle.
[10:47] Shall we look at some data, Rachel?
[10:48] Yeah, let's crack into it.
[10:49] Just to get moving before we go for about many hours.
[10:53] So let's have a look at the latest housing market news as usual.
[10:56] We can talk our way through it.
[10:57] We've done a lot already.
[10:58] And as usual, we'll look at prices, rents, vacancy rates, and of course auction markets, which have been really showing us the sign of where we've been heading for most of the year.
[11:09] So we shouldn't be surprised at what prices are telling us because the auction markets have been reflecting that.
[11:16] The latest home building data.
[11:17] And look, no change in our undersupply.
[11:21] In fact, if anything, it's getting worse.
[11:23] It is getting worse, yeah.
[11:24] And these are the other factors, you know, not just through sentiment and cyclical changes, is that will drive, you know, change in the market.
[11:33] And that's the fact that we just don't have enough properties.
[11:35] We don't have enough new buildings coming into the market.
[11:38] And I don't think – well, I don't think it's going to be the solution, the changes to the tax position.
[11:45] Or just puts further strain on an already strained construction industry.
[11:49] That's right.
[11:50] And that's the other point is we're still seeing higher house building costs.
[11:53] There's no change in that.
[11:55] And even the ABS are –
[11:56] showing with their data that house building costs are still on the rise.
[12:02] Yeah.
[12:02] And we'll have a look again at the latest building block costs.
[12:07] And they're just crazy.
[12:08] Because ironically, the further the costs are, the more they go up, that's going to continue to increase property prices.
[12:15] That's right.
[12:15] It's just the continued flow on effect.
[12:17] Which makes it harder for first home buyers anyway.
[12:20] Even further.
[12:22] And we discussed last week or last month the changes, what they were planned to mean for the new property taxes.
[12:32] And it's designed, according to Treasury, to increase by 7,500 the number of first home buyers.
[12:39] It was like...
[12:40] Oh, wow.
[12:41] 75,000 in a decade.
[12:43] I'm like, that's not even going to put a dent in our target.
[12:46] Well, there were 120,000 first home buyers last year.
[12:49] So it's like, okay, but it'll probably drop by about 50,000, the number of investors.
[12:55] So you get 7,500 more first home buyers.
[12:59] That's good.
[13:01] But you're going to get 50,000 fewer maybe speculating investors, which will mean 50,000 fewer.
[13:08] rental properties in a market that's already chronically undersupplied in terms of new dwellings coming in and isn't that going to mean higher rents higher rents lower vacancy rates so it's it just keeps going but that's exactly why we're here because we break all that data well we're showing the data and and like you know that makes it so those seven and a half thousand potential first home buyers
[13:29] They've got to still get in the market now, likely paying more rent, you know.
[13:33] So that makes them harder for the saving profile and, you know.
[13:37] And we're even seeing just a slight uptick in the unemployment rate.
[13:41] And that's something that will affect first home buyers because they're at the early stage typically of their careers.
[13:47] Yeah.
[13:47] And when we do start to see an easing in the business cycle, the early stage careerists, typically first home buyers, are the ones that struggle the most and are more concerned with job security going forward.
[13:59] So, you know, it puts that 7,500 number under pressure.
[14:03] So we'll see how that outcome.
[14:06] But we will look at the latest rental data.
[14:08] which for first-home buyers is not good news again.
[14:11] You know, it's a real sign that we're seeing another uptick in rents.
[14:16] And, you know, that's the last thing I guess our rental market needs, well, tenants need, is another surge in rents, which we thought we'd flatlined last year, but now we're back to –
[14:27] higher rents.
[14:28] So we'll look at rents and of course we'll start off looking at what we've already discussed in depth, what the Reserve Bank decided for rates, the labour market and inflation and we'll just look at the typical outcomes for, as we do every month, for house prices through the changes in the cycle.
[14:46] So let's have a look at the economy.
[14:48] Of course rates are on hold.
[14:52] Three months in a row, higher rates.
[14:55] I think just about everybody and their dog predicted
[14:57] an interest rate hold.
[14:59] Yeah.
[14:59] But we did say this last month, right, and as you said, perhaps the outlook was now, you know, more for a wait-and-see approach.
[15:08] Yeah.
[15:08] And I think the Reserve Bank has said that going forward.
[15:13] So, yeah, on hold at 4.35%, as we said, following those...
[15:18] three sharp cuts, sorry, those three sharp increases, which followed the three sharp cuts last year.
[15:25] So we're back to where we started.
[15:27] So when are we going to get back to where we really started, which was when we had the interest rates at the beginning of last year?
[15:34] And I think it's not too much to speculate that that's where we're headed.
[15:38] Yeah.
[15:39] You know, I think that...
[15:40] With inflation maybe now not a bigger concern with oil, hopefully under control.
[15:47] Electricity certainly as the... We'll get back to normal in terms of electricity prices as we move through the end of the subsidy phase.
[15:56] And I think that...
[15:58] I really think that we're... You know, the next move in interest rates will be down.
[16:02] Now, the question is when.
[16:04] But it might be sooner rather than many of the pundits predict...
[16:08] And I think that'll be just the fuel which will – the housing market's needed to recover.
[16:14] Because we've got to remember while all this doom and gloom is happening, people are earning more money, they're saving more, right?
[16:22] They're not engaged in the market.
[16:24] Household formation's still happening.
[16:26] People are still getting married or whatever, still having children, still need a bigger home or a smaller home.
[16:31] or wanting to go to the bush or the beach to retire or have a second home.
[16:37] So those things continue to occur in the background, which creates demand.
[16:42] And that's why we see a surge in demand when confidence returns and particularly when affordability improves, like with lower interest rates.
[16:48] But we've said all that before, but I think it's worth pointing out to everybody.
[16:52] Well, even banks are banking on it, no pun intended, because a lot of them are shifting their fixed rates down.
[16:57] Yeah.
[16:57] you know, we know that they're not making these decisions by just throwing a dart at a dartboard.
[17:01] No, no, well, they've got...
[17:02] They've got their own economists and, you know, researchers that look into this quite extensively to make these decisions.
[17:09] And that's a really good signpost.
[17:11] Yeah.
[17:11] That's the sort of thing, you know, that your group provides, understanding what interest rates are doing and what it means in terms of their future direction.
[17:20] So I think the Reserve Bank Governor was a little bit pessimistic in terms of the outlook.
[17:26] Maybe I'm just becoming too optimistic now or realistic now.
[17:31] And they still have some, I guess, concerns given the rollercoaster ride of the last 12 months with official interest rates.
[17:38] She did voice that.
[17:38] She said we're not quite out of the woods.
[17:41] You know, we may see some rate rises.
[17:42] They're not off the table, she says, but, you know, I think when we look at the data a bit closely, it's not as bad as I think she is.
[17:48] No, no, no.
[17:49] Yeah.
[17:49] Yeah, and it's probably improved since Tuesday when they had their meeting.
[17:54] So...
[17:55] Yeah, and she also said, oh, don't be concerned if the economy starts to ease.
[18:01] And I thought that was interesting because that's the other side of the equation because they're also going to be concerned if we continue to see, even though unemployment rates are still low historically, higher unemployment rates, obviously that will mean more impetus for lower interest rates, particularly if inflation goes.
[18:21] looks to be improving, you know, which I think it will.
[18:25] So that then means they're shifting their focus to the unemployment rate.
[18:29] So, again, it's another argument in favour of saying we've maybe reached the peak of this cycle and that the next move in interest rates will be down.
[18:37] We'll see, right?
[18:38] So that's the story of interest rates.
[18:41] It looks a bit funny, doesn't it, that big sort of hole over the last 12 months, if you know what I mean?
[18:45] Yeah, the big dip.
[18:46] Just like, yeah, the big dip.
[18:47] Yeah, okay.
[18:48] Oh, that's the oil crisis.
[18:49] Yeah, okay, maybe, maybe not.
[18:51] But as I said, I think that's where we're heading back is we'll see...
[18:55] the dip, then the spike, and then down again.
[18:58] And I think that might happen sooner rather than later, in my opinion.
[19:01] Inflation, of course, was down, interestingly, over April, which is our latest data.
[19:07] Headline inflation fell to 4.2%.
[19:09] So that's sort of adding to the story that maybe our inflation numbers will improve.
[19:14] Underlying inflation, however, was higher.
[19:17] And that's still the highest since October 2024.
[19:19] And that's the Reserve Bank's
[19:21] a preferred measure.
[19:22] And that's why, you know, the governor's probably like, hey, you know, we're still not out of the woods here.
[19:26] Well, that's why we can't just look at the headline inflation numbers.
[19:28] That's right.
[19:29] Because the RBA's looking at the underlying.
[19:31] Yeah.
[19:32] But we're now seeing even though electricity prices are still rising strongly, they're not as rising as...
[19:40] as quickly as they were the previous month, the annual prices.
[19:44] And oil prices actually fell, still a big rise over the month of April, the year to the month of April of 18%, but not as bad as that 24.2%.
[19:52] So another sign that...
[19:55] We're heading in the right direction for the big drivers of inflation, which has been energy, that's electricity, and fuel and oil.
[20:02] So as I said, we're only trying to make a position here based on the evidence.
[20:09] And I think free of any type of clickbait hysteria because we want to inform people in a legitimate way.
[20:18] you know, way as to what's likely to occur, because we don't get a lot of that in terms of the big picture discussion broadly in the media, in terms of, you know, the economy and the housing market.
[20:29] Rental growth was lower again, but we've got to understand the rental measures the Reserve Bank use, sorry, the ABS use, are the whole rental market.
[20:39] So, they include leases existing with the rental market we use here,
[20:43] rental market data is asking rent.
[20:45] So that tells you just how the market's feeling right here and now.
[20:49] But the other problem we sort of alluded to is that they're continuing to measure the ABS higher building costs for houses.
[20:56] So I'm not sure that's going to end anytime soon.
[20:59] And that's really bad news for the building industry and supply because even if you're getting the building approvals through, you get to build them because you can't afford to build them because it's too expensive, you know.
[21:11] So – and the target range remains outside – or the inflation rate.
[21:17] The underlying inflation rate remains outside the target range.
[21:21] That's our inflation numbers.
[21:23] We show this every month.
[21:24] Again, you can see the target, midpoint of the target range at 2.5%, that underlying inflation is still well above that.
[21:33] So I guess the argument's still there that interest rates need to be higher.
[21:39] uh, or re really remain at that level, um, uh, until the underlying inflation rate starts to move downwards.
[21:48] Uh, electricity, uh, we can see they're the main components again, uh, improvements in both fuel and electricity, uh, rents also improving, but new house costs not.
[21:58] Um,
[21:59] And the total, and that's underlying, sorry, headline inflation down a little bit.
[22:04] So heading in the right direction, electricity.
[22:07] We've spoken about the impact on the subsidy the government provided from 24 to 25 on electricity prices.
[22:14] That was great in the short term, but then, hey, no more subsidy, higher electricity prices.
[22:19] So it's like no such thing as a free lunch, Rachel.
[22:24] And we're paying for it now after having a nice period from 24 to 25.
[22:29] And you can see how that's influenced interest rates, obviously, this year as electricity prices started to rise again.
[22:36] And that was, you know, the driver for the Reserve Bank's February change with oil, the driver for the last two rises after that, which was in March and May.
[22:47] So...
[22:48] This is the latest oil data, Rachel.
[22:50] Have a look at this.
[22:51] This is what we were talking about before.
[22:54] That's right.
[22:55] 76.62.
[22:55] 76.62, right.
[22:57] And that's just fallen in a hole.
[23:00] There was obviously a more surety about the end of the war, you know, that that was it.
[23:10] There's no more speculation about it.
[23:12] And we're not too far above where we were a year, well, before it all happened.
[23:16] So, again, another very positive sign, I think, going forward for interest rates, the economy and the housing market particularly.
[23:25] We can feel that relief now knowing the excise cut is going to end in two weeks.
[23:31] That's right.
[23:31] The peace treaty is already done.
[23:32] And people are like, what excise cut?
[23:34] Oh, right, petrol.
[23:35] Oh, isn't that great?
[23:36] The tax has been cut on it.
[23:37] Wasn't there an oil crisis?
[23:39] It wasn't an oil crisis.
[23:40] And it was a nice conversation.
[23:42] And look, we didn't know where that was going to end because it was on, it was off, it was on, it was finished, it was back on again.
[23:49] And now finally we have some confirmation that it is over.
[23:52] Well, it is over.
[23:53] And look, in a way, I think we also discussed this.
[23:56] I think there was a lot of pressure on the American president to fix this.
[23:59] To do that, yeah.
[24:00] And it was just getting to the point where, and I think Iran was like, hey, we can jerk this guy around for, you know what I mean?
[24:06] Because he's got an election, he's got elections coming up in November and they're probably saying, hey, you know, Donald, fix this man because we've got to go to the polls soon.
[24:16] Yeah.
[24:16] It's not going to be helpful to still be at war.
[24:18] At least for Australians, it's a sigh of relief that the timing's worked out well for us.
[24:23] Well, it has, yeah, going forward.
[24:24] So we keep our fingers crossed that there's no other left field type of, you know, problem.
[24:29] And, of course, we always show this slide, well, recently we have, and that's the clickbait thing.
[24:33] So Armageddon is off, end of the world.
[24:38] For now.
[24:38] For now.
[24:39] But stay tuned, you guys.
[24:40] We've got more clickbait coming when it's back on again.
[24:43] But I think the oil Armageddon is off.
[24:46] for a bit more than just for now.
[24:48] So we'll see.
[24:50] Now, the interesting thing was that the jobs market, still positive, low unemployment rate, but it's a little bit higher.
[24:57] In fact, it's the highest for a few years.
[24:59] Yeah.
[24:59] And it wasn't just the unemployment rate, it was also the number of jobs fell.
[25:03] and the number of unemployed increase.
[25:05] So still low at 4.5%, but as I said, the highest for a couple of years.
[25:11] It is a business cycle, so it moves up and down because that's what makes it a cycle.
[25:16] And I don't think those higher interest rates help the business cycle that much anyway.
[25:20] But we've been up, this has been one of the strongest periods of Australia's economic growth in the post-COVID period.
[25:27] And it had to start to ease, but still very strong.
[25:30] But as I said, unemployed numbers are a little lower and the number of unemployed was also higher.
[25:36] The participation rate also fell slightly, still high, but that was part of why we had a higher unemployment rate.
[25:45] And WA, no surprise, still with the lowest jobless rate.
[25:49] And there's our unemployment rate.
[25:50] Still doesn't look too bad, Rachel.
[25:51] No, it's still not too bad.
[25:53] I mean, how do you think the tax changes, particularly to trust, because a lot of small businesses run out of trust, and there have been a lot of reports coming out saying that people have got a hiring freeze.
[26:04] So how do you think this is going to impact?
[26:06] Well, it's a law of unintended consequences.
[26:08] Exactly.
[26:09] And I think the government's a little bit nervous at the moment.
[26:13] It's got an election coming up next year.
[26:15] Well, that's why we just saw an article about Albanese backflipping on the CGT threshold for the small businesses.
[26:22] So that threshold hasn't changed for 20 years.
[26:24] So they're talking about increasing it from $2 million to $10 million now.
[26:28] So it should be some more relief for them, but it doesn't sound like the tax change of 30% on trust is going to change.
[26:35] And look, this just adds to the picture when we look at, well, yeah, still a good number for our unemployment rate.
[26:42] Yeah.
[26:43] it's heading in the wrong direction.
[26:44] Yeah.
[26:45] And surely they wouldn't want that next year and not just interest rate increases this year.
[26:50] But as you said, those changes to property taxes are now having those, you know, law of unintended consequences.
[27:00] Yeah.
[27:01] And we don't know what the consequences are for the other property changes, particularly with higher rents.
[27:07] If there's, you know, less property transactions occurring as we move through a period of uncertainty, you know, that's less stamp duty collections for state governments.
[27:20] Yeah.
[27:21] And that's, you know, income.
[27:23] So they can spend less and…
[27:25] So it is looking towards being a bit of a conundrum.
[27:29] But look, we don't have to be too worried about unemployment rate at 4.5%.
[27:35] It's once it gets to 5%.
[27:36] Because as you can see in the pre-COVID period, we were sort of tracking around about 5.2%.
[27:44] And that's when the Reserve Bank was dropping rates because it was not happy with those 5% unemployment rates.
[27:51] numbers.
[27:51] But we're still at 4.5%, you know.
[27:54] So we're well below that already and maybe beyond the interest rate rise period.
[28:01] Speculating, but that's what we're here to do, evidence-based speculation, all right.
[28:08] And the participation rate, yeah, down a little bit, still quite high, but that's also part of the story.
[28:13] People perhaps becoming a little more discouraged about getting into the workforce.
[28:17] And as I mentioned, WA, the lowest unemployment rate, but all the states have unemployment rates higher than where they were a year ago.
[28:26] Also, economic growth, even though it's still quite strong, and the Reserve Bank Governor mentioned that, the quarterly growth rate, and they're the annual growth rates up there, Rachel, which are really good at the post-COVID stimulus level at 2.5% per annum.
[28:47] to 0.3 of a percent.
[28:49] So it's just another sign, you know, that maybe the Reserve Bank's got to be careful about interest rates going forward.
[28:56] And that means it's got to start thinking about stimulating, not restricting, which it's been doing.
[29:02] And I think it's sort of aware of that, but the future will reveal it.
[29:05] So rates from now on, we've said that, mixed messages in terms of higher inflation still.
[29:13] But...
[29:14] and also higher unemployment.
[29:16] So they're going to wait and see.
[29:18] But as I said, I think that the signs looking forward to what's been driving the Reserve Bank decisions are looking better and that we can always say, well, we know where the rates have got to be once inflation looks better.
[29:29] And that's only going to be earlier rather than later if the unemployment rate starts to look a little softer as well.
[29:36] Home building still falling.
[29:39] You know, this again is the story.
[29:41] Every month, typically we see it bounce around from month to month, particularly with volatile unit approvals.
[29:51] But overall approvals down 2% following an 11.8% fall
[29:57] over March, so down 2% over April.
[30:00] Units were down 3.6%, houses lower by 1%.
[30:03] South Australia was the top performer.
[30:06] The trend's just really going nowhere, Rachel.
[30:09] There's the data there.
[30:10] Still pretty good when we look at the full year comparisons for units.
[30:15] These are national building approvals.
[30:17] But the year to date, that's the first four months of this year compared to the same period last year, we're not seeing the same number of units being approved.
[30:25] So that big surge we had early last year, it's run out of gas, you know.
[30:30] And that's just another sign that, hey, this was great early days.
[30:34] Maybe we're going to, you know, resupply our housing markets, but not so, I think, going forward.
[30:39] And this is what our investors are going to be looking at closely now that they're further incentivised to go into new builds.
[30:46] But if the more that approvals fall, our supply is going to be an issue, further issue.
[30:52] That's right.
[30:52] And then what happens to rent?
[30:53] So it's that ripple effect we keep talking about.
[30:55] Yeah, and the government cannot control this.
[30:57] I mean, then we become like housing socialism and there's just only short-term sort of solutions that become bigger long-term problems.
[31:08] How are they going to stop rents rising if there's just not enough property there?
[31:13] How are they going to get more rental properties if investors are disincentivised by having not the same tax breaks that they had but are also given rent control?
[31:25] environments.
[31:26] You know, it's just not going to happen.
[31:27] And I think that the government realised that is a huge political risk.
[31:31] That's what they've announced.
[31:32] They're talking, you know, we're working with the state governments to, you know, get rid of some of that red tape and approvals through.
[31:38] But that's the thing.
[31:40] They've made that decision at a federal level when it's actually managed at a state level.
[31:43] Yeah.
[31:44] Look, as I said, I think it's a conundrum.
[31:46] It's all like, can we create this nirvana where everybody can get a house who wants a house?
[31:50] Yeah, sure, right.
[31:51] That's not Australia.
[31:52] That's not how our housing market works.
[31:54] You know, it's about aspiration, about saving, making sacrifices, you know, and for the medium to longer term and to reap the financial benefits.
[32:03] or the financial security that has come with that traditionally, you know, and it can't be manipulated even though, you know, it sounds theoretically doable.
[32:14] It just can't happen.
[32:15] So we better move on.
[32:16] The trend is starting to just flatten now after some pick-up last year where we look at houses and units.
[32:22] You can see the volatility units.
[32:24] But, yes, even units now are starting to fall away after a good start last year.
[32:32] Melbourne, as usual, still the epicentre of dwelling approvals.
[32:37] But we are starting to see some big numbers now coming out of Perth in terms of dwelling approvals.
[32:43] No surprise there because of such a strong Perth market.
[32:47] plenty of demand for new housing, as there is everywhere.
[32:51] But when we look at the year on year, or sorry, this is the year to date, so this is the first four months of this year versus the same period last year, you can see how Melbourne and Sydney units have really flatlined or gone backwards since the same period last year.
[33:07] And they've been driving a lot of the new approvals, particularly for units, and now it's not happening.
[33:14] So it'll be interesting to see if they can...
[33:16] sort of come up with another solution in terms of getting more high-rise building approvals.
[33:20] But that's certainly not a good statistic there for Melbourne and Sydney.
[33:24] Adelaide down with small numbers, but Perth up as we saw before.
[33:28] But Brisbane, some big numbers there coming through for Brisbane.
[33:32] And that's, of course, still a very strong market.
[33:35] Very strong unit market there.
[33:36] Yeah, and strong unit market.
[33:37] And that'll be welcomed by those that are looking for units.
[33:39] And the big picture of this shows how we've lost all that building approval energy from way back in 2015-16, still down 24.5%.
[33:49] And when we break it down, it's really units that have fallen away.
[33:52] in that period down 41.3%.
[33:55] And we can see that pick up that we've had over the last year, but certainly not maintaining itself anywhere near the levels that we've had in previous periods to provide enough housing.
[34:08] Building costs, I mentioned that, a slight increase in building costs.
[34:12] You see how they've gone through the roof.
[34:14] um since the previous government's uh home builder allowance up a little bit over april the year on years looking a little bit more steady but 4.4 percent given the pre uh the pre home builder allowance period is still way too high in a highly competitive building uh and highly competitive industry such as home building um
[34:37] And that, of course, is just exacerbating the supply problem.
[34:40] This is our statistic on house building blocks.
[34:44] So these are house building blocks, not development sites.
[34:47] And there's just some crazy numbers here.
[34:49] Look at Brisbane, 30.6% from the year.
[34:51] I know, I know.
[34:53] And only 61 sales.
[34:54] Right?
[34:55] Wow.
[34:56] That's crazy.
[34:57] And Perth up 53.9%.
[35:01] Can you believe that?
[35:03] And the average block of dirt in, a metre of dirt in, if I could say that, in Sydney is $2,300 just for a metre of land.
[35:14] And the average size of a block of land in Sydney is 315 square metres.
[35:18] Yeah.
[35:18] So you want a backyard?
[35:20] Forget it.
[35:20] I get it.
[35:21] It's interesting.
[35:22] Your money goes further in Melbourne on a block though.
[35:24] Yeah, it is.
[35:25] Well, they've got a more broad acre environment, whereas it's more geographically restricted in Sydney.
[35:33] But it begs the question of how interstate migration might shift if this is a trend that continues.
[35:38] That's right.
[35:39] Of course.
[35:39] That's a really good point.
[35:40] They were hurt by that during COVID, but if it ends up being you get a lot more for your money there...
[35:44] Well, that's now Melbourne's the least expensive of all the major capitals, you know.
[35:49] So you're right.
[35:50] It's like reverse, you know, Groundhog Day.
[35:53] What's going on here?
[35:54] I mean, not Groundhog Day, but, you know, we're going back to the future in terms of recalibrating where people can afford to live on a capital city by capital city basis.
[36:05] But, you know, I was, dare I say that Brisbane has the weather, but which
[36:10] moment doesn't yeah we'll always win on that front that's right but uh maybe that's overstated but anyway moving on um our housing target we know that we show that that the the federal government set a housing target and it's uh in its first year realizing it was a bit ambitious a little ambitious 30 percent down just in the first year and the latest data isn't showing us any revival uh home rents this is really
[36:32] The sobering, this is two months in a row now, Rachel, where we've seen clear signs of a rental breakout.
[36:38] Rents are now on the rise consistently.
[36:41] No surprise given these extraordinary low vacancy rates for both.
[36:44] They're all under 1.5%.
[36:45] Yeah, I know.
[36:46] And look at housing.
[36:47] It's even Canberra, 1.2%.
[36:50] Melbourne and Sydney now 1%.
[36:52] So on current trends, it's not going to be too long before we have vacancy rates all below 1% for houses.
[36:58] And if that doesn't mean higher rents, well, come on.
[37:01] I know.
[37:01] Seriously.
[37:02] What are you going to do?
[37:03] It means basically there's no properties for rent.
[37:05] Yeah.
[37:06] And for the, you know, 20, 30 or 40 people who turn up at all the open homes looking to secure a rental property, you know, it's like bad luck except for one.
[37:18] And, you know, it really does leave fertile ground for manipulation of the system, you know.
[37:24] You can't believe that there wouldn't be some sort of rent auctioning going on in the background under these circumstances, which is forbidden in most states, you know.
[37:36] But when you have such a shortage of supply and such demand, and we're going to see fewer investors from the government's plans.
[37:43] I'm not sure how they're going to, in an already...
[37:47] chronically undersupplied rental market with rents now rising again for both houses and units.
[37:54] There's our QR code for the latest rent report.
[37:57] Those that are watching this can get a copy of that, a PDF copy.
[38:01] Let's have a look at home prices.
[38:04] Not booming so much as they were.
[38:07] And this is what we've been seeing, is an easing through the cycle.
[38:10] We mentioned that.
[38:11] Melbourne and Sydney, the underperformance for house prices over May, 1.6%, 1.2% and down this year so far.
[38:20] Still positive results there in Brisbane.
[38:22] Still up 5% this year, the Brisbane market, notwithstanding what's happening with interest rates.
[38:30] And, you know, Perth's up 24.5% still over the year.
[38:33] Yeah.
[38:36] And Brisbane up 19.7%.
[38:39] And for units, a little bit lower units.
[38:41] Again, Sydney down 1%.
[38:45] Melbourne actually performing better for units, even though it is 0.4% of a percent.
[38:49] Our latest data is showing actual some growth in the Melbourne unit market, which is sort of counterintuitive or certainly counter to what,
[38:56] other markets are doing at the moment in the face of that cyclical easing and higher interest rates.
[39:03] But look at units in Brisbane over the past year up by 26.7%.
[39:06] I mean, you're going to look back one day and say, how can, you know, 26.7%, you know, if you're, you'd be just rubbing your hands together with glee, you know, if you're a,
[39:17] a Brisbane unit owner at those sort of numbers and Perth up 27.2%.
[39:21] It's really not far behind Sydney at all.
[39:23] No, that's right.
[39:24] And that's the numbers also.
[39:26] The latest data we actually see, you can see Melbourne, you can see there that Brisbane is 1,224,000, well ahead of Melbourne.
[39:35] The latest data actually shows us that Perth is now ahead of Brisbane.
[39:38] Yeah.
[39:39] What a crazy market that's been.
[39:41] But really catch-up mode, and maybe that's a lesson for the Melbourne market, for those, you know, focusing on the Melbourne market, that Perth was really down and out for, you know, years and years following the end of the big mining booms of the middle 210s, and now it's, you know...
[39:58] heading north at a rate of knots faster than any other market.
[40:01] So opportunity knocks.
[40:03] There's the QR code for our...
[40:06] for our latest house and unit price report.
[40:10] So just finishing off, Rachel, with the latest auction market data, we saw, of course, that as we show every week, every month, I keep saying that, that vacancy rates are a good forward indicator of what's happening.
[40:28] Sorry, auction clearance rates are a good forward indicator of what's happening with prices, as we can see there with Sydney...
[40:34] clearance rates and prices.
[40:37] Same deal with Melbourne.
[40:39] And we can see there how vacancy rates have, sorry, how clearance rates have started to ease as prices have started to ease.
[40:48] The latest auction results.
[40:50] Interesting, of course, we had the most states had the King's Birthday
[40:55] holiday yeah i maybe it's my generation i just find it very hard to say that king's birthday as opposed to queen's birthday bring back the queen's birthday anyway uh or maybe the monarch's birthday i don't know but we certainly had a surge of listings the previous week because of that uh the holiday distractions um this week we had a uh sorry we had a a falling away of listings we've had a surge in listings over the past week you would have expected that would have put downward pressure on yeah
[41:22] Clearance rates, but no, clearance rates actually were quite steady over the week.
[41:28] Sydney up a little bit, 62.5% with a big rise in listings.
[41:34] Melbourne actually up also with a big rise in listings.
[41:37] So not all doom and gloom there.
[41:38] Certainly well below where they were a year ago where lower interest rates were driving the market.
[41:44] Now we have the reverse rate.
[41:45] So Brisbane, we've seen some low clearance rates coming through in Brisbane recently, but we haven't been getting a lot of observations, a lot of reported auctions.
[41:56] So we need to take that with a bit of a grain of salt.
[41:58] Adelaide's been a big decline and it is a market that's gone from...
[42:03] boom to easing quite quickly this year but a clearance rate under 50 percent um which is well below a year ago and canberra uh it was down after having a few weeks of reasonable results so the trends are all the same here rachel no surprise uh vaca clearance rates falling as interest rates increased and lower than where they were a year ago so again it's uh
[42:27] It's good to keep watching those auction results every week because they tell you what's happening with the market.
[42:32] Melbourne, the same as Sydney, Brisbane, likewise starting to ease.
[42:38] But again, we start to see an easing in clearance rates as the winter market approaches because of –
[42:44] you know, that distracted environment.
[42:47] And the same for Adelaide and well down really on some of its peaks earlier this year where we had clearance rates over 80% and Canberra also easing.
[42:58] So no surprises there.
[43:00] As you know, you can get a look at the latest auction results every Saturday around 6 o'clock on my LinkedIn channel, which is Doc Andrew Wilson at LinkedIn.
[43:08] And on Sundays you can get the full national report.
[43:11] which is very exciting because you have the regional breakdowns from Melbourne and Sydney and the top 10 sales under the hammer.
[43:17] So if you want the latest national auction report, there is a QR code.
[43:22] And we'll finish off now, Rachel, with our summary of the market.
[43:28] So as we've discussed today...
[43:30] Markets are still chronically undersupplied for homes and land.
[43:33] House building costs are still rising.
[43:35] Migration is a little lower but set to remain high.
[43:39] Rental markets are tight with rents still rising.
[43:41] We just saw that.
[43:42] Significant first home buyer.
[43:44] Government policies is creating demand.
[43:46] That's their agenda.
[43:47] The share market still is an underperformer, so as an option, as an asset class, it really doesn't provide the long-term outcomes that property does.
[43:56] Investors' incentives clearly remain for new homes, and we still have, of course, in Australia...
[44:05] As usual, strong aspiration for home ownership and investment.
[44:10] Higher rates typically influence confidence in the short term, but clearly provide buying opportunities.
[44:17] And as we discussed, Rachel, governments are at risk from that sort of problematic housing socialism.
[44:25] And beware the law of unintended consequences, you know, which is all around us.
[44:29] So incomes and wages still rising, supporting affordability as prices and rates rise.
[44:37] A strong economy with still low jobless rate, a fundamental driver of housing markets.
[44:42] So that really doesn't change.
[44:43] The fundamentals are still pushing up prices and rents.
[44:46] And the big picture is when we do get declines, cyclical declines, they're quite modest by comparison to the increases.
[44:53] We've had a 25% increase in the last three calendar years for the National Capital City House price.
[45:02] I still think we'll go close to a positive this year, Rachel, given, as I said, I think the growing prospect that maybe we'll get some interest rate cuts, certainly a cut this year before the year's over.
[45:16] And I think the doom and gloom will be a little short-lived this year compared to what it was.
[45:22] We started the year off extremely strong as well.
[45:24] You can't forget that.
[45:25] That's right.
[45:26] We can't continue to do it unless, as we discussed originally, you have a lower interest rate or certainly higher incomes.
[45:34] And this is a bit of a storyline.
[45:36] The last time we had our cyclical downturn, which was that 4%, 4.3%, you can see how RBA rates were rising.
[45:42] We had 13 rate rises between May 22 and...
[45:51] in November 23.
[45:53] And yes, prices started to fall, as we can see there.
[45:57] But it was only a fall of around about four months, even though we were getting more interest rate increase.
[46:04] So prices actually started to recover and rise, while interest rates were rising.
[46:09] Because people get, you know, over the doom and gloom, they start realising that it's oversold and they get back into the market.
[46:16] Yeah.
[46:16] And I think that's with 13 interest rate rises, not three, that we've had.
[46:21] I think you said something really interesting that I don't think we've mentioned before, that, like, life goes on for people.
[46:26] Yes.
[46:26] People need to buy homes, be close to work, they get married, they want to live with their partner.
[46:30] So it doesn't change the fact that there's still that demand for housing.
[46:35] That's right.
[46:35] And they wait and see for a short period.
[46:38] Yeah.
[46:38] It's like, oh, this is really scary, Armageddon.
[46:40] And then, like, oh, it doesn't happen.
[46:41] The peace treaty sign.
[46:43] Electricity price growth is easing, you know, and I've just got a pay rise.
[46:48] You know, it's still a good economy, you know.
[46:51] I've just got a new job.
[46:53] I'm retiring or I want a beach house or whatever.
[46:56] These things are occurring.
[46:58] And over the medium term, they start to act.
[47:00] And then people start thinking, hey, look, the market's – that's really good value, you know.
[47:04] And then the whole thing changes.
[47:06] And that's what we saw there.
[47:08] Even with those consistent interest rate increases, the market started to get a bit sick of all the negativity and life went on.
[47:15] Yeah.
[47:15] Right?
[47:15] And there was value in the market because prices were up.
[47:18] And it's like, hey, I can actually borrow a little bit more here, right?
[47:21] Whatever.
[47:23] as my income's risen and I don't have to pay as much for a house or a unit.
[47:29] And you're right, and that just consolidates the revival in the market.
[47:35] So, and as we said before, house prices are certainly a better outcome over the longer term in terms of capital growth.
[47:43] compared to the share market.
[47:44] Of course, there are other factors involved.
[47:46] But look at Perth.
[47:47] I thought Perth was quite interesting there.
[47:49] Now, Perth is now back to the number two in terms of capital, and yet it's still nowhere near the growth of the other capital city markets since way back in 2007.
[48:01] Well, they really had nowhere else to go but up.
[48:04] For a long period of time.
[48:05] And they still have, right?
[48:07] So if you could look at that, that tells you the story that there is a potential for revival going forward.
[48:13] It goes back to my conversation about Melbourne with the interstate migration.
[48:17] You know, Perth was a market that benefited from COVID lockdowns where people wanted out of those areas that really suffered.
[48:24] Yeah.
[48:25] And the mindset becomes really, you know, quite stuck.
[48:29] Yeah.
[48:29] It's like, oh, you know, blah, blah, blah, things are bad.
[48:32] You know, it's doom, it's gloom.
[48:34] And then it starts to turn.
[48:35] The salt stickers come back on the boards.
[48:37] It's like, oh, gee, did you see the place down the road, salt?
[48:40] How much is it?
[48:41] Wow.
[48:41] I better get in and buy before they go up even more.
[48:46] And, of course, most buyers are sellers and sellers are buyers.
[48:49] So it's like swings and roundabouts.
[48:51] You've got to just stay in the market per se and not miss out on the property that you're after because at the end it's about choosing that particular property that you want and you don't want to miss out on that.
[49:02] And these are all, as that chart showed us,
[49:05] These are the times of opportunity because you're not competing with as many people out there because in the shorter term, confidence is lower.
[49:12] Yeah.
[49:14] And, you know, that means that opportunities rise going forward.
[49:18] So it's actually a pretty good winter market coming up because it's sort of heightened by all the other negativity.
[49:25] So that's the comparisons.
[49:27] And, of course, all we hear about is to offset the misinformation and ignorance that remain the curse of Australia's housing market.
[49:36] No misinformation, no ignorance here, clickbait free zone, right, onwards and upwards and you wait and see, right?
[49:43] because those that rationalise and act on all the fear it generates and a bit of fear out there, you act and rationalise on that and I think that there will be positive outcomes because there is nothing to fear but fear itself.
[49:56] And, of course, if you are part of the...
[49:59] If you are part of the Infinity community, you get access to the My Housing Market Infinity data app.
[50:04] So find out how to get hold of that because it does give you insights not only to the latest news and also our podcast, our monthly podcast, but you also get to see what's happening with asking prices for houses, units and townhouses in every suburb in Australia, Rachel.
[50:21] So nice little information resource to lock into and the folks at Infinity will tell you how to get onto that.
[50:28] fantastic app which also gives you some information for investors on the current yields on a suburb basis the top yields on a suburb basis and if you've missed anything in our presentation today there is a qr code to access that so have we got anything to finish off with we're feeling a lot better aren't we yes this month the data is definitely looking a lot it's a lot better we can craft a much better conversation around the fact that this has been an interruption yeah
[50:57] which we typically have.
[50:58] And we also expected.
[51:00] Yeah, that's right.
[51:01] Well, we did because it was starting to show at the end of last year.
[51:05] And we know that Perth market had plenty of upside, as we've seen, because it's still down compared to the other capitals over the longer term.
[51:13] So I think things are, you know, certainly for those that were concerned about the direction of the market,
[51:19] um maybe concerned about the direction of interest rates i think the news is a lot more positive um a lot more positive this uh this month and of course they can all tune into your latest thoughts on uh on what's going forward and uh i'm sure like i said uh we um we can be a bit more positive um in terms of the outlook but we'll be back in next month and uh we'll be able to see just how things are going
[51:44] Yep, awesome.
[51:45] Thank you, as always, Doc.
[51:46] Thank you, Rachel.
[51:47] There you have it, guys.
[51:48] That's it for our Wilson Monthly Market Update for June.
[51:52] We will be back next month with more information for you.
[51:55] As Doc said, this is a clickbait-free zone and a fear-free zone.
[51:59] Until next month.

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