Herron Todd White's (HTW) August 2026 Month in Review points to a housing market losing momentum on almost every measure, even as the Reserve Bank left the cash rate on hold.
National dwelling values fell 0.7% over the month and 1.9% over the quarter to July, the largest declines since December 2022, according to Cotality data cited in the report.
At the same time, stock on the market has swelled. SQM Research figures show total listings nationally reached 278,984 in July, up 22.8% year-on-year and the highest total since 2020.
Properties are also taking longer to sell, with median time on market stretching to 44 days, up from 27 days a year earlier, while vendor discounting has widened to its largest margin since May 2023.
HTW chief economist Cameron Kusher wrote that the imbalance between buyers and sellers was becoming more pronounced.
"With buyer interest subdued, sales volumes well down on a year ago and listings high and rising, sellers are finding it much harder to secure a buyer," Kusher wrote.
Behind that imbalance sits a policy story as much as a cyclical one. HTW attributes much of the slowdown to recent federal budget changes affecting negative gearing and capital gains tax, alongside a ban on limited recourse borrowing for residential property inside self-managed super funds. That ban took effect on 10 August under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, closing off a lending channel that industry estimates suggest may be several times larger than the government's original projections.
June quarter mortgage lending data showed new lending and refinancing both fell sharply. ABS data shows investor loan commitments fell 8.6% in the June quarter — the sharpest drop since September 2022.
First-home buyer loan numbers also fell, though the average loan size for this group rose 3.3% over the quarter and 10% over the year. Kusher wrote that the broader lending pullback was likely to continue.
"With the weakness in values expected to continue, it's likely that lending will also continue to slow over the coming months," Kusher wrote.
HTW CEO Peter Maloney (pictured) noted the Reserve Bank held the cash rate at 4.35% for a second consecutive meeting on 11 August, though the bank's own forecasts still allow for a further increase before inflation returns to target.
"Every so often, anecdotes and data finally meet, and in this market cycle, August is that moment," Maloney wrote.
With spring listings expected to rise further against soft demand, HTW flagged the risk of additional price falls as more vendors are forced to compete for a shrinking pool of buyers.
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