Market Pulse

3 things that moved, and what they mean for you

This week inflation handed the Reserve Bank the result it was hoping for, a lender stretched investor loans out to forty years, and Victoria woke up to a new premier.

1. Inflation eased, and the August hike is off the table. Last edition we said everything hinged on Wednesday's inflation figures. Here is what they said.

• The Consumer Price Index rose 3.8% over the year to June, down from 4.0% in May.
• Trimmed mean inflation, the measure the Reserve Bank actually watches, held steady at 3.6%.
• In the month of June alone, prices actually fell 0.1%.

That was enough to change minds. CBA, NAB, ANZ and Westpac now all expect the Reserve Bank to hold on 11 August, leaving the cash rate at 4.35%.

One number worth sitting with though. Housing was the single biggest contributor to inflation at +6.8%, driven by electricity up 22.4%, new dwellings up 5.8% and rents up 3.6%. Inflation is cooling overall, but the cost of keeping a roof over your head is not.

2. AMP stretches investor loans to 40 years. AMP Bank has launched a product called Equity Flex, the first of its kind from an Australian bank.

• A loan term of up to 40 years, against the usual 30.
• Up to 10 years of interest-only repayments with no reassessment along the way.

It is for investors only, so you cannot walk in and ask for one. But this is the second week running that a major lender has made life easier for investors, after Westpac's move last edition. More investor borrowing power aimed at the same entry-level homes first-home buyers are chasing means more competition at open homes, not less.

3. Victoria has a new premier. Jacinta Allan resigned on 28 July after almost three years in the job, and Ben Carroll was sworn in as premier the same day, with Gabrielle Williams as his deputy.

No housing policy has changed yet, and it would be premature to guess what will. What is worth knowing is that Victoria goes to a state election in November. Housing is expensive, rents are rising, and both sides will be making promises about it between now and then. If you are buying in Victoria, stamp duty concessions and first-home buyer support are the things to keep an eye on.

What it means for you

Your borrowing power is safe now. Rates are almost certainly on hold next Tuesday, so the number a lender will give you this month is the number you had last month. Use that stability rather than waiting on it, because the competition side is moving against you. Two lenders in two weeks have handed investors more firepower, and that lands hardest on exactly the price bracket most first-home buyers shop in.

Source: ABS (June 2026 CPI), RBA, CommBank & Aussie (economist forecasts), AMP Bank (Equity Flex), Crikey & Neos Kosmos (Victorian leadership)

Negotiation Tip

What should I do when a home passes in?

Sydney's clearance rate just fell below 50%, so roughly one in two homes taken to auction did not sell on the day. Sydney auctioneer Tom Panos recently described a weekend of six auctions with zero sales, and not a single registered bidder, as the worst of his 30-year career. Passing in is common right now, and knowing what to do in that moment matters.

• Do not rush in on the day = if you are the highest bidder, the agent will walk with you straight inside to negotiate while the disappointment is fresh. That urgency is manufactured and it is working on you, not just the vendor. You are allowed to say you will come back at another time, or to not engage at all if you wish.
• Let the week do the work = a vendor's expectations move furthest in the seven to ten days after a failed auction, once the phone stops ringing. The property that was "priced from $750,000" on Saturday is often a different conversation the following Wednesday.
• Put a date on your offer = a clean offer with finance sorted and a short expiry gives the vendor a reason to decide rather than relist and wait another month.

The Data

This week's auction clearance rates

City	Clearance rate
Melbourne	59.6%
Adelaide	52.6%
Sydney	49.7%
Canberra	43.9%
Brisbane	42.0%
Perth	87.5%*

*Perth's figure comes from just 8 collected results. Cotality treats anything under 10 as statistically unreliable, so ignore it this week.

The auction clearance rate is the quickest way to read the market's temperature. Above 70% and buyers are competing hard, below 60% and the pressure sits with sellers. Two things stand out this week. Sydney has dropped below 50%, down from 56.1% a week ago, so half of all Sydney auctions are now failing. Melbourne went the other way, climbing to 59.6% and pulling clear of Sydney for the first time in a while.

The combined capitals came in at 53.6%, up from 52.4% last week and 50% the week before. That is worth noticing. Last edition we led with an auctioneer calling it the worst day of his 30-year career, and the mood in the room genuinely was grim. But three weeks of slowly improving numbers say the market is soft rather than falling apart. Both things can be true, and the data is the more reliable of the two.

Source: Cotality, preliminary results week ending 2 August 2026.

Suburb Spotlight

Devonport TAS 7310

Houses · North-West Coast Tasmania · LGA: Devonport

Median Price	$585,000
Capital Growth (12mo)	20.6%
Rental Yield	4.64%
Weekly Rent	$532
Vacancy Rate	0.61%
DSR Score	50
Days on Market	23 days
Stock on Market	0.49%
Vendor Discount	2.17%
Renter to Owner-Occupier Ratio	36.9%

Our Score 8/10

Our Analysis = Devonport is a city on Tasmania's north-west coast, one of Tasmania's strongest regional centres in its own right. Two numbers here are exceptional. Stock on market is just 0.49%, which is remarkably tight, and vacancy sits at 0.61%. Put simply, there is almost nothing to buy and almost nothing to rent. Homes are moving in 23 days on a median of $585,000, which buys a house here rather than the unit that money gets you in a capital city. The 4.64% rental yield is strong, and at $532 a week the rent does real work against the mortgage. Values are up 20.6% over the year, and with supply this thin, that pressure is not obviously easing. Two things to be aware of. Vendors are discounting 2.17% off asking, which is a little softer than the rest of these numbers would suggest, and the DSR sits at 50, right on the balance line. Everything else here points firmly in the right direction.

Unsure how these stats affect capital growth? Check out our Instagram that breaks down each term.

Source: Moorr, REA & HtAG

Reader Question

Should I take a 40-year loan so I can borrow more?

Fair question this week, with AMP stretching terms out to 40 years and other lenders already offering them. A longer term does lift what you can borrow, because the assessed repayment is spread across more years.

• Increasing your borrowing capacity = stretching from a 30-year loan term to a 40-year loan term lowers the monthly repayment, which lifts your borrowing capacity and can get you into a purchase you could otherwise not reach.
• You pay for it in the long run = an extra ten years of interest charged on the loan balance adds up to a substantial amount, and you own less of the home along the way because the balance comes down more slowly.
• Does it impact your retirement? = a 40-year term taken in your mid-thirties runs into your mid-seventies. Lenders look closely at how a loan gets repaid past retirement age, and it is worth asking yourself that same question before they ask you.

The real question is not whether you can borrow more, it is whether the purchase works on a normal term. If the numbers only come together at 40 years, that is telling you something about the price rather than the product. A broker can run both terms side by side so you can see the total cost, not just the monthly one.

General information only, not personal advice. Chat to a broker or adviser about your situation.

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