Australia Watch: Monthly chartbook #14: Soft housing and weak consumers meet stubborn inflation

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Australia Watch: Monthly chartbook #14: Soft housing and weak consumers meet stubborn inflation

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Australia Watch

Monthly chartbook #14: Soft housing and

weak consumers meet stubborn inflation

Housing momentum slowing rapidly 30 June 2026

Capital city house prices likely fell by 0.6% in June (after falling 0.2% in May), led by Economics

1.2% m/m and 1.0% m/m declines in Sydney and Melbourne respectively (Exhibit 31). Australia

Soft auction clearance rates and a drop in homebuyer sentiment to an 18-month low Nick Stenner, CFA

point to continued weakness in housing conditions in the months ahead which will help Australia & NZ Economist

ease RBA concerns around excess demand. Merrill+61 2 9226Lynch5031(Australia)

Consumers remain deeply pessimistic nick.stenner@bofa.com Johnny Liu, CFA

Consumers remain deeply pessimistic, with the Westpac-Melbourne Institute sentiment Australia & NZ Economist

index falling 2.9% to 80.6 in June, around the weakest level in decades. Negative Merrilljohnny.liu2@bofa.comLynch (Australia)

sentiment reflects persistent cost‑of‑living pressures, with households reporting a sharp Oliver Levingston

worsening in assessments of both current and expected family finances. Household FX and Rates Strategist

spending increased by 1.3% in May to largely offset the fall in April, leaving nominal Merrilloliver.levingston@bofa.comLynch (Hong Kong)

spending broadly flat over the two months. Isabel Hartstein

Jobs growth stalled over April/May… FXMerrill& RatesLynchStrategist(Australia)

Employment grew by 40.3k in May broadly in line with expectations (BofAe: 35k), isabel.hartstein@bofa.com

reversing a downwardly revised 40.7k fall in April. The 3-month average has fallen from

27k through 1Q to only 6k in May.