Australia’s target to deliver 1.2 million new homes in five years is losing momentum, with building approvals for new homes down 1.1% in May and apartment-related approvals plunging 10.4%, ABS data show. To meet the goal, the country would need to approve an average of 20,000 homes a month, a level it has not reached since May 2021. The target faces added headwinds from three recent interest-rate hikes, changes to housing and capital gains tax settings, and a 1.3% quarterly fall in prices, while CoreLogic data show national home values slipped 0.4% in June.

Bendigo Bank economist David Robertson warned that Australia could still face another interest-rate increase before the end of the year, even after the RBA paused in July and with core inflation still above target. He said headline CPI fell to 4% in May, but core inflation rose to 3.6% and is likely to stay above target for at least another 12 months. He also flagged that the housing market has entered a ninth downturn cycle, with Sydney and Melbourne expected to fall 7%–8%. The Middle East war was cited as a potential upside risk to oil prices, without referencing any new military action or supply disruption.

Australia’s housing market has entered its ninth downturn, with Domain forecasting Sydney house prices will fall 7% and Melbourne 8% in the new financial year. Major banks including NAB also expect a nationwide decline of 2%-5%, and some modelling suggests Sydney values could drop by just over $100,000 from a median of about $1.75 million. The slide is being driven by consecutive interest-rate rises, changes to negative gearing and capital gains tax, and weaker consumer confidence linked to the US-Iran war. Clearance rates have fallen to 47%, the lowest since the COVID-19 pandemic, pointing to a sharp drop in market liquidity.

Australia’s supermarket giant Coles confirmed it is in talks with private equity firm TPG Capital about a potential acquisition of pet care company Greencross, which is valued at about A$4 billion. Greencross owns 267 retail stores and more than 140 veterinary clinics, alongside a range of pet services assets. Coles shares fell about 5% after the disclosure. Separately, the ACCC blocked Coles’ plan for a new supermarket and liquor store in Kalgoorlie, Western Australia, citing concerns it could substantially lessen competition in the local market.