Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
House Prices Fall Across Most Capitals as RBA Rate Hike Fears Grow Before CPI
Highlights
Introduction
House prices are falling across most of Australia, and RBA rate hike talk is adding to the strain. National home values dropped 3.7% over the September quarter, according to the latest home value data. That leaves them 5.2% below the record set in March. Values have now fallen for six months in a row.
Sydney led the slide with a 4.9% quarterly drop. Brisbane and Perth each lost 4.7%, and Melbourne eased 3.4%. Only Darwin bucked the trend, with values up 0.5%. On the share market, the key S&P/ASX 200 gauge closed at 8,793.2, down 0.43%.
Why Rate Hike Fears Have Grown
The cash rate sits at 4.60% after four increases this year. On Wednesday, Andrew Hauser, the RBA's deputy governor, said the inflation outlook had worsened markedly compared with the bank's August projections. In his view, recent price data has run at or slightly ahead of forecasts. He indicated the September quarter figure will probably exceed what the bank assumed in August. He pointed to higher oil prices, rising AI and tech-related prices, and domestic capacity pressures.
Futures pricing for a move at the 3 November meeting has risen since his remarks. A quarter-point rise would take the cash rate to 4.85%. The Australian dollar edged up about 0.1% to about US$0.702.
The next big test is the September quarter CPI release on 28 October.
Developer Sales Slow
Mirvac Group (ASX: MGR), which builds homes and owns office, retail and industrial assets, gave a first-quarter update on Thursday. Buyers committed to just 429 of its lots over July to September. That compares with 763 a year earlier, a fall of about 44%. Sales were also 17% lower than the June quarter.
The group said buyer interest cooled most in Victoria and NSW. Queensland softened, while Western Australia held up. Settlements rose to 291 lots from 265. Mirvac kept its FY27 earnings guidance of between 13.2 and 13.4 cents a security.
Share Price Movement
Mirvac shares ended the session unchanged at AU$1.82. Stockland (ASX: SGP), a major builder of residential communities, added 0.24% to AU$4.19.
Property trusts beat the wider market. Their S&P/ASX 200 A-REIT index gained 0.76% to 1,520.9.
The banks also gained. ANZ Group Holdings (ASX: ANZ) climbed 1.20% to AU$39.69. Westpac Banking Corporation (ASX: WBC) rose 0.42% to AU$35.68. National Australia Bank (ASX: NAB) advanced 0.20% to AU$40.01. Commonwealth Bank of Australia (ASX: CBA) inched up 0.10% to AU$157.17.
The benchmark index lost 38.1 points on the day.
What Investors Should Watch
Conclusion
The housing downturn has broadened from a few cities to most of the country. Developers are already feeling softer demand, and a further rate rise would add to the pressure on buyers. Next week's inflation figures will likely shape the RBA's November call.
Note- All data presented is based on information available at the time of writing.
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