Before we get into this week’s Recap, if you are enjoying this publication each Monday, I’d encourage you to tell more people about it and share it with them. If you have any feedback about how this could be done differently or better please also let me know. Otherwise, I hope you are enjoying my work. Now for what’s happened over the past week.
Over the last week we’ve got new data on new home sales, Cotality’s Pain and Gain Report, Domain’s Price Forecast Report for FY 26, new population data, job vacancies and labour force data, a new report from Finder on First Home Buyers and finally preliminary auction clearance rates.
Let’s take a look.
Housing Industry Association New Home Sales May 2025
Key insights
The volume of new home sales was +6.9% over the month of May 25, reaching its highest level in 13 months.
While sales volumes were higher overall, it was driven entirely by increases in NSW and Vic, the two states which have seen the weakest new home sales over recent years with a 20 month high in NSW and a 13 month high in Vic.
New home sales remain historically low and a long way short of the volume required.
What does it mean?
It’s positive to see an uplift in new home sales following the second cash rate cut by the Reserve Bank. Sales improving in NSW and Vic is also a positive development given how weak new home sales have been in these markets. I would expect that we will continue to see new home sales trend higher over the coming months, but the volume of sales is likely to remain well below previous highs. Regulatory barriers and elevated construction costs which subsequently lead to a significant premium for new houses in certain areas remain a headwind for the market while lower borrowing costs are helping to encourage an improvement.
Cotality Pain and Gain Report March 2025 quarter
Key insights
Of the 86,000 dwellings resold nationally over the Mar 25 quarter, 94.9% sold for more than their purchase prices which was steady over the quarter.
Of those properties reselling for a profit, the median gain was $305,000 whilst across loss-making resales the median loss was $44,000.
Nationally, units were much more likely to make a loss with 9.9% of resales over the quarter doing so, compared to 2.8% of house resales making a loss.
The median hold period of a loss-making resale was 7.5 years while the median hold period of a profit-making resale was 8.9 years.
What does it mean?
We continue to see most properties that are resold making a profit which speaks to the fact property prices have continued to rise in recent years which has also resulted in hefty typical profits. Units were much more likely to resell at a loss than houses which reaffirms the value of the land as the key driver of the value of a property. With interest rates coming down and home value growth lifting, albeit still growing at just a moderate pace, I would expect the coming quarters will continue to see a low share of properties reselling at a loss.
Domain Price Forecast Report 2025-26 Financial Year
Key insights
Prices are forecast to rise in FY26 +6% for houses and +5% for units across the combined capital cities thanks to lower borrowing costs, government support for first home buyers, rising household incomes and the ongoing shortfall of new housing supply.
The uplift in prices is expected to be relatively modest due to the entrenched affordability challenges.
Across the markets analysed, forecast price increases are: Sydney (+7% for houses, +6% for unit), Melbourne (+6% for houses, +5% for units), Brisbane (+5% for houses, +5% for units), Adelaide (+4% for houses, +3% for units), Perth (+5% for houses, +6% for units), Canberra (+4% for houses, +3% for units).
What does it mean?
In my view these forecasts look very reasonable we know lower interest rates boosts borrowing capacities but after the recent run-up in prices borrowing capacity remains stretched which in my mind limits price growth from here. I perhaps see the smaller markets performing a little stronger and perhaps Sydney and Melbourne in particular somewhat weaker. This is mainly due to the heightened volume of stock still for sale in Sydney and Melbourne compared to Brisbane, Adelaide and Perth and the disappearance of investor buyers in Victoria. Even if the break-up of price growth was a little different I thing that circa 5% price growth across the combined capital cities is likely.
National, State and Territory Population December 2024 quarter
Key insights
Over the final quarter of 2024, the national population reached an estimated 27,400,013 persons which was 91,133 (+0.3%) higher over the quarter and 445,924 (+1.7%) higher over the year.
The annual population increased of 445,924 persons was the smallest annual increase since Jun 22 and the +1.7% rate of growth was the slowest growth since Jun 22 also.
Natural increase (births minus deaths) was 105,174 persons over the year and net overseas migration was 340,750 persons over the year and accounts for 76.4% of the total population increase, its smallest share since Sep 22.
Across the states and territories the change in population and rates of growth were: NSW (108,056, +1.3%), Vic (132,572, +1.9%), Qld (102,756, +1.9%), SA (20,673, +1.1%), WA (70,312, +2.4%), Tas (1,580, +0.3%), NT (3,130, +1.2%) and ACT (6,838, +1.4%) with each region except Tas seeing a slowing of the rate of growth over the past year.
What does it mean?
After a massive surge in population growth over recent years, the rate of population growth has slowed although the rate of growth is still elevated and sits at levels not previously recorded since 2017. While the rate of population growth is expected to continue to slow, the fact it is still substantial is adding to significant demand for infrastructure and housing at a time in which we aren’t building enough of either. The high rate of population growth will continue to fuel demand for housing, mostly rental housing, and maintain the upwards price pressures despite limited wage increases for most households. Rental affordability will continue to be a challenge for households.
Jobs and Skills Australia Internet Vacancy Index May 25
Key insights
In May 25 there were 208,029 jobs advertised online which was -2.8% over the month, -12.7% over the year and -31.9%.
The number of jobs advertised online is still +24.2% compared to the beginning of 2020.
Across the state and territories the monthly, annual and change from peak in the number of jobs advertised online is: NSW (-2.2%, -11.1%, -37.1%), Vic (-1.7%, -18.8%, -44.3%), Qld (-3.4%, -8%, -18.5%), SA (-2.9%, -3.3%, -14.8%), WA (-4.1%, -12.9%, -23.9%), Tas (-7.7%, -27.7%, -31.3%), NT (-7.7%, -11.4%, -17.2%), ACT (-4.9%, -24.7%, -40.6%).
What does it mean
Over recent months the Internet Vacancy Index has been showing some weakening of online job listings and given the weak consumer spending I would expect this will continue over the coming months. This phenomenon is also reflected in the weak monthly job growth. While job advertisements are still high on an historic basis they have fallen a long way from their peak showing some slackening of the labour market. If this slackening persist we may see the unemployment rate rise and job creation slow even further over the coming months.
ABS Labour Force May 2025
Key insights
Total employment was virtually unchanged over the month but was +2.3% over the year with full-time employment +0.4% over the month and +2.6% over the year while part-time employment was -0.9% over the month and +1.7% over the year.
The unemployment rate was steady at 4.1% over the month but was up from 4% a year ago while the underemployment rate was 5.9%, down from 6% over the month and down from 6.7% a year ago.
The employment participation rate fell from 67.1% to 67% over the month while total hours worked was +1.3% over the month and +3.1% over the year.
The unemployment rate in each state and territory was: NSW (4.1%), Vic (4.4%), Qld (3.7%), SA (4.3%), WA (3.9%), Tas (4.0%), NT (4.1%) and ACT (4.2%).
What does it mean?
Although the unemployment rate was unchanged, it was a weak labour market in May 25 with job creation slowing and employment participation falling. The labour market remains very tight with low unemployment rate which should support households but as we’ve seen lately households have significantly reigned in their spending. Interest rate relief should help but if we start to see the unemployment rate lift over the coming months we may see a weaker consumer which in-turn could necessitate interest rate cuts sooner and potentially a deeper rate cutting cycle.
Finder First Home Buyer Report
Key insights
Only 28% of recent first home buyers are spending less than 30% of their household income on mortgage repayments, 37% are spending more than 40% of their household income on their mortgage repayments.
Only 12% of the first home buyers surveyed had a deposit of more than 20%, 49% had a deposit of less than 10%.
55% of recent first home buyers don’t regret their purchase, 26% regret it because they paid too much. 11% regret not saving a bigger deposit and 10% regret the purchase because they didn’t buy in a good area.
According to the survey 56% if first home buyers purchased with a partner, 39% bought by themselves and 5% bought with a family member or friend.
What does it mean?
The report is worth a read and for me the interesting thing was the level of regret that first home buyers had which to me, highlights the desperation to purchase which can lead to poor purchase decisions being made. On almost all metrics in the report things have become harder for first home buyers since the last survey. There are a large volume of first home buyers purchasing with small deposits which suggests to me the federal government first home buyer incentives on offer from the start of next year allowing purchase with a 5% deposit and avoiding lenders’ mortgage insurance is likely to be quite popular.
Cotality Preliminary Auction Clearance Rates week ending 22 June 2025
Key insights
The preliminary auction clearance rate lifted from 70.1% the previous week to 73.9% last week with Cotality reporting it was the highest preliminary auction clearance rate since July last year.
This occurred on a slightly lower but still substantial 2,040 capital city auctions which was down from 2,183 the previous week.
Canberra was the only major auction market to record a fall in preliminary clearance rates over the week (55.3% vs 60.7%) with increases Sydney (73.5% vs 70.5%), Melbourne (76.6% vs 72.2%), Brisbane (66.7% vs 61.4%) and Adelaide (77.5% vs 67.1%).
What does it mean?
Auction volumes are strong and preliminary clearance rates are typically in the high 60% to low 70% range indicating that buyer demand has lifted. Whilst 50 basis points worth of interest rate cuts have probably not created a significant amount of additional buyers, the signal that interest rates are likely to fall further and the expectation of property price gains is likely the key driver of the renewed market confidence. I expect we’ll continue to see clearance rates remain in a similar range over the coming weeks.