Market snapshot

A quick read of the key numbers as at 24 June 2026.

Sources: ASX, S&P, RBA, US Federal Reserve, ICE, ABS, Investing.com. Intraday figures to 24 June 2026.

The 2027 property tax reform

The 12 May Budget introduced the most significant change to property investment taxation since the 50% CGT discount was created in 1999 — and although it does not commence until 1 July 2027, the market has begun repricing roughly thirteen months ahead of time.

Two measures sit at the centre of the package. First, investors who buy an established property after 7.30pm on Budget night can no longer offset rental losses against their wages or other income; those losses are quarantined and may only be applied against future rental income from that property, or on sale. Second, the long-standing 50% capital gains discount is replaced with inflation-adjusted cost-base indexation alongside a minimum 30% tax rate on the gain.

Crucially, the design steers capital rather than simply taxing it. Existing investors are fully grandfathered — if you owned the property, or held a binding contract, before Budget night, nothing changes. New builds are exempt, retaining full negative gearing and the choice of whichever CGT method is more favourable at sale. The result is a deliberate two-tier market that rewards new supply.

The banks moved their forecasts in response. CBA estimates the combined effect is equivalent to a 90–155 basis point rise in effective mortgage costs for established-property investors, and trimmed its 2026 national forecast from 5% to 3%. Westpac now expects capital cities broadly flat; NAB forecasts a 2% fall across the capitals.

The RBA’s third hike, then a pause

The Reserve Bank lifted the cash rate by 25 basis points to 4.35% on 6 May in an 8–1 decision, completing the full reversal of the 2025 cutting cycle. The June meeting on 16 June then held steady, as the market expected, but the Board kept an explicit tightening bias: further increases remain possible if inflation does not cool as forecast, and Cotality notes cuts are unlikely until well into 2027.

Inflation is moving in the right direction at the headline but remains sticky underneath. Annual CPI eased to 4.2% in April and to 4.0% in May, helped by the halving of the fuel excise from 1 April. The trimmed mean, however, firmed to 3.6% — its highest in over a year — and the RBA’s own forecasts do not see underlying inflation back inside the 2–3% band until mid-2027. With APRA’s 3% serviceability buffer, new borrowers are still assessed above 7.35%.

One market, splitting in two

Two forces are reshaping housing at once: three rate rises that have already bitten, and a tax change still a year from commencing but already in buyers’ calculations. Together they have flattened the national figure while the gap between cities has stretched to the widest Cotality has recorded.

The Cotality Home Value Index was flat nationally in May (0.0%), the softest monthly result in a year. Annual growth has moderated from a February peak of 10.0% to 8.8%. Underneath that calm surface, Sydney slipped 0.9% in May and sits 2.1% below its November 2025 peak; Melbourne fell 0.8% and remains 3.2% under its March 2022 record. The resource and affordable capitals, meanwhile, are at fresh highs — Perth is up 25.8% over the year (and 91.4% over five), with Brisbane, Adelaide and Darwin all at record values.

The full capital-city picture

The table below brings the monthly, quarterly and annual moves together with current median values.

Source: Cotality Home Value Index, June 2026 release (data to 31 May 2026). Perth, Hobart and Darwin are predominantly private-treaty markets.

Auction clearance has cracked

Auctions are the sharpest read on demand in the investor-heavy southern cities. A healthy market clears in the 60–70% band; across the combined capitals the rate fell to 49.8% for the week ending 13 June — the weakest since April 2020 and down from a 72% peak last September. Every auction-active capital has now dropped below the healthy band, with Brisbane recording 34.1% in early June. Adelaide has held up best.

Sources: CoreLogic / Cotality and Domain auction reports. Brisbane and Perth are smaller, more auction-light markets; Hobart and Darwin transact largely by private treaty and are read through dwelling-value trends instead.

Rents and yields stay firm everywhere

While prices wobble in the south, the rental market is doing the opposite. National rents are up 5.9% over the year with vacancy at just 1.5% — well below the decade average of 2.5% — and the national gross yield has firmed to 3.62%. Darwin leads the country on both counts, with 10.0% annual rent growth and a 6.0% gross yield, the highest of any capital.

The rate-hike effect on buyers

The flip side of firmer yields is a higher income hurdle. Three rate rises this year have lifted the household income needed to service a median house across every capital. In Sydney it has climbed to roughly $178,000, up from $170,000 in January.

Source: Cotality, May 2026. Investor share of new lending hit 40.3% in March — the highest since 2016 — a level Cotality expects to fall as the 2027 changes approach.

AI is now the index

The S&P 500 set a record 7,600 on 31 May before pulling back. The headline obscures an unusually narrow market: Goldman Sachs estimates AI-related companies now account for roughly 45% of the index’s market capitalisation, while the other 499 stocks have been broadly flat since February. Hyperscaler AI infrastructure spending is forecast at US$754 billion this year, up 83%. That concentration cuts both ways — genuine earnings power, but a benchmark increasingly sensitive to any shift in AI sentiment.

Closer to home, the ASX 200 has been steadier, supported by easing Middle East tensions and softer energy prices, and is up around 4.3% over twelve months on the back of financials and healthcare. Gains have been uneven: BHP fell 5.1% after flagging cost overruns at its Jansen potash project, and the banks softened after the Fed’s hawkish signal.

A fragile peace, and cheaper oil

The standout geopolitical development was a 14-point US–Iran memorandum of understanding signed on 15–17 June, establishing a 60-day ceasefire, lifting the US naval blockade of Iranian ports, and committing to reopen the Strait of Hormuz — through which around 20% of global petroleum transits. The first technical talks at the Bürgenstock resort in Switzerland on 21 June, led for the US by Vice President JD Vance, drew “encouraging progress” from mediators Qatar and Pakistan.

Brent has fallen from above US$90 toward US$79–81 on the news — a genuinely disinflationary development that could ease pressure on central banks, the RBA included. But the deal is fragile: Iranian forces briefly reimposed Strait restrictions on 20 June, and ceasefire violations in Lebanon are ongoing. Markets are pricing a partial, not a full, resolution of the risk.

For owners, buyers and portfolios

If you already own an investment property

Grandfathering means the 2027 changes do not alter the tax treatment of what you already hold. Rising rents, firming yields and tight vacancy continue to support a hold for established positions. The sharpest exposure sits with investors tightly geared into east-coast established stock who may transact again before 2027 — a cohort already adding to Sydney and Melbourne listings.

If you’re buying or investing

Less investor competition is the intended upside, and first-home-buyer lending has risen to 29% of owner-occupier loans, aided by the 5% deposit guarantee. The trade-off is a higher income hurdle from rates. New builds are where the Budget is deliberately directing capital — they keep full negative gearing and CGT optionality. In the investor-heavy southern cities, buyers now hold more negotiating leverage than they have in years.

For diversified portfolios

The simultaneous tightening across Australia, the US and Europe, the concentration of global benchmarks in a handful of AI names, and an Australian dollar near US$0.70 all point the same way: currency moves and AI valuations are now material swing factors for international allocations. None of this changes the core discipline — diversification across asset classes and geographies, and long-term positioning over reaction.