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Australia home values fall 0.7% in July amid consumer spending resilience
The Cotality nationwide home value index is now 1.6% below its March peak, while household spending rose 0.8% in June.
Australia’s housing market took another step down in July, with Cotality’s nationwide home value index falling 0.7%. The index had already declined 0.5% in May and 0.7% in June, leaving prices 1.6% below their March peak, according to Action Forex.
The housing pullback is broadening across state capitals, Action Forex reported, with Brisbane and Adelaide shifting from gains to losses and Sydney and Melbourne dropping by more than 1% per month. The backdrop includes restrictive monetary policy, weak homebuyer sentiment following the Budget, and broader economic uncertainty.
Despite the housing gloom, recent data point to resilience in household spending. Action Forex said nominal household spending increased 0.8% in June, lifting the Q2 gain to 1.3%, with price growth accounting for 0.6% and higher volumes contributing 0.7%.
Action Forex also highlighted that income growth has lagged spending growth over the past year, leading households to draw down on savings. It noted that aggregate drawdowns this year appear relatively modest, suggesting households still have some financial buffers, with a median consumer rebuilding savings to around 2022 levels before the post-pandemic tightening cycle.