You’re listening to SBS on the Money with Ricardo Gonçalves
RICARDO GONÇALVES
Hi everyone, happy new financial year because it is Tuesday, the 1st of July 2025. Not necessarily too happy on the share market because the ASX 200 flat to 8,541.
RICARDO GONÇALVES
But still plenty to talk about with Mark Gardner from NPC Markets in a few moments. But we’ll start with the property market because interest rate cuts have propelled home prices higher last financial year across all capital cities, except one. Cotality says the median national price rose to a record in the 12 months to June and while it’s a 3.4% increase, it’s also the slowest annual result since August.
RICARDO GONÇALVES
2023. Of the capitals, Adelaide was the best performer over the financial year, with prices up 8%, that’s the median price, followed by Brisbane, Perth and Darwin. Sydney remains the most expensive capital on median property there, $1.2 million and prices up 1.3% over the last 12 months, while Melbourne was the only one to record a fall down 0.4%.
RICARDO GONÇALVES
Month on month, prices rose just 0.6% nationally. So, I spoke with Coality’s head of research, Tim Lawless, to describe that pace of growth.
TIM LAWLESS
It’s pretty mild, Ricardo. I mean, a 0.6% rise definitely isn’t shooting the lights out, but the difference here is it’s really broad-based. We’re seeing values rising virtually everywhere, almost every capital city apart from Hobart,
TIM LAWLESS
in every regional market, and it’s happening since the first rate cut back in February. So, I think in summary, it’s, it’s a very, I suppose, broad-based growth cycle we’re we’re moving into, but we’re not seeing those rising all that quickly.
RICARDO GONÇALVES
Also, it’s happening though, in your report against a backdrop of relatively low home sales. Why? And what does that mean?
TIM LAWLESS
I think there’s a couple of reasons for this. So we’re seeing annualised turnover, tracking at about 4.9% at the moment. That’s a little bit below average. You typically expect to see a little bit more than 5% of homes transacting a year back in the height of the pandemic, when the market was really frothy, we were seeing about 6% turnover. So part of this is simply due to the fact that there’s a lot of barriers to more people transacting. Particularly, affordability is really stretched, lending policies are pretty conservative, and household debt levels are relatively high.
TIM LAWLESS
But there’s also the fact that stock levels are really low, and I think that in itself keeps a bit of a lid on volume. Listing numbers are generally well below average across most markets now.
RICARDO GONÇALVES
If we look at the national picture over the last financial year, uh, prices are up 3.4% nationally. How does that compare, and how would you rate it?
TIM LAWLESS
So that’s again a pretty mild outcome. I mean, the 3.4% in dollar terms, that means we’ve seen the market go up about $27,000 on the median value. And there’s a couple of markets, well, Melbourne in particular, where values were just down a little bit over the past 12 months. But to give you some context, you know, 3.4%, that’s the lowest annual growth rate we’ve seen since about August of 2023. And to go back again to the height of the pandemic, when the market was racing along, we were seeing about a 25% national annual growth rate.
TIM LAWLESS
So 3.4%, it’s sustainable, it’s relatively low, but there’s quite a bit of diversity there. Those mid-sized capitals still leading the annual pace of growth, even though they’re slowing down, and some of those softer markets like Melbourne and Hobart, sort of just around the neutral mark.
RICARDO GONÇALVES
So looking ahead into the new financial year, what do you ultimately think will drive prices and just how strong do you think the market can be?
TIM LAWLESS
Well, ultimately, this is about interest rates, and I think it’s no surprise that we saw this positive inflexion in value trends in line with the February rate cut and then propelled along by the May rate cut, and chances are we’ll see another rate cut next month, a few more later in the year. So that should support housing markets. But as I mentioned, there’s still a few barriers in place that are probably going to be preventing this market moving into a more significant growth cycle.
TIM LAWLESS
So my guess is, with affordability quite constrained, lending policy pretty limited as well, we’ll probably only see housing values rising somewhere between 5 and 10% nationally, probably on the more conservative side of that estimate.
RICARDO GONÇALVES
As we know, there are many different markets around Australia. It’s not just one housing market, so which parts of the country do you see as having the best growth in the new year, and what are your predictions for the property hotspots of FY26?
TIM LAWLESS
Hard question, mate. I’d probably be looking towards markets like Melbourne to outperform. I mean, Melbourne’s been an underperformer over the last 5 years or so, so it’s really built up this very strong competitive affordability advantage. We’re starting to see interstate migration, moving back towards positive territory, yields are a bit higher, and starting to hear investors becoming a little bit more interested in the Melbourne market.
TIM LAWLESS
I mean, as a bit of an outlier, Darwin is a very strong market now. It’s finally just gotten back above its record high. It’s from all the way back in 2014. It’s a very affordable market, again, quite attractive to investors. Outside of those two, I’d also be looking towards Southeast Queensland. There’s a huge amount of infrastructure underway that’s got a hard deadline with the Olympics, a lot of population growth coming across the border, and a sheer undersupply of housing in that market as well.
RICARDO GONÇALVES
And finally, we’ve spoken about, you know, property markets for owner occupiers and investors, but what about the rental market, what’s that like? I know that the Bureau of Statistics, when they talk about inflation, they’re starting to see those price increases moderate quite significantly now.
TIM LAWLESS
Yeah, absolutely. The private sector data tends to lead the CPI rental data, and we’ve been seeing rental markets slowing for a couple of years now. The annual rate of growth is about 3.4% for rental movements. We haven’t seen it that low since early 2021. Rents aren’t going backwards, and they’re coming out of this, this period of extraordinary rental growth, so there’s no real relief here for renters.
TIM LAWLESS
But the good news is we’re not seeing rents rising anywhere near as quickly anymore, and chances are with vacancy rates still really tight, we’ll continue to see some mild upwards pressure on rents. But it’s hard to see rents rising materially higher, given most renters are dedicating about a third of their income to paying rent, and it’s pretty hard for them to pay more than that, especially given this recent history of cost-of-living pressures.
RICARDO GONÇALVES
That’s Tim Lawless there from Cotality.
RICARDO GONÇALVES
Now, market day on the SBS on the Money podcast.
RICARDO GONÇALVES
First trading day of the new financial year, and the market finishes flat. The S&P ASX 200, 8,541. That’s despite another record day on Wall Street overnight, where the S&P 500, and down the road, the NASDAQ also hit record highs. To tell us more, I spoke with Mark Gardner, CEO at MPC Markets. So, Mark, US shares hit a record overnight. Here, the response has been a bit more muted. Why and what’s going on?
MARK GARDNER
Overall, I think what we saw was the, um, end of quarter move in the US, um, the banking sector over there doing relatively well after the Federal Reserve gave the all clear on the stress tests for the banks on Friday. There is a tendency at the end of quarters, um, for, you know, fund managers, etc. to prop up the market a little bit and lock in those, those gains for the quarter.
MARK GARDNER
I dare say that, most, you know, most market analysts or fund managers or investors certainly would not have expected the market to finish here, given where we went in those April lows.
RICARDO GONÇALVES
I think locally the market’s been quite quiet, but I did find an interesting story in the US dollar, right? 6 months into 2025, the US dollar has had its worst half year period since 1973, down almost 11% on the US dollar index, so that’s like a basket of currencies, I think it’s 6 currencies. So, so what’s happening there?
MARK GARDNER
Essentially, that US debt, if you think about it in terms of a credit rating, even just for an individual, you know, if you, if you rack up a large debt and then you’ve got a reduced ability to pay, obviously your credit rating goes down. That’s happening to the US. It’s been the reserve currency for a number of years now. It took a couple of 100 years for it to get through $1 trillion in debt, and then it spiralled out of control since pretty much the GFC, and the credit crisis from 2007 to 2011.
MARK GARDNER
So essentially what’s happening is when the Federal Reserve prints money, that devalues the currency, the US because of those mega cap companies and the and the investor inflows from, you know, foreign sovereign funds, etc. It’s propped up the US dollar, but overall, staring down the barrel of Trump essentially not addressing the US debt, I think there’ll be further credit downgrades down the line.
MARK GARDNER
So people are getting away from the US dollar. It’s been a bit of a trend for probably the last year and a half. You can see it in the rise in gold prices, the rise of Bitcoin, particularly as a store of value, because people are worried about central banks printing money again.
MARK GARDNER
It’s very much is a lack of confidence in the US remaining the reserve currency of the world, which is why it’s a little bit patchy between the, you know, the Australian, it’s not necessarily to do with the Australian dollar or the euro or the yen, it’s more to do with people losing a little bit of faith in where the US is headed.
RICARDO GONÇALVES
How does the Aussies sit against all those other currencies, because like you mentioned, if it’s a story about the US dollar,
RICARDO GONÇALVES
Investors are losing confidence in the US dollar because we see the Aussie at about 66, you know, US, which it hasn’t been at a while, but against the euro and pound, it hasn’t made those kinds of gains.
MARK GARDNER
I think it comes back to a lack of confidence in the US dollar. The Aussie itself is probably a lot more tied to the Chinese currency and the Chinese economy, because of our mining sector in particular. And I would say if we are considered what’s called a risk currency, which I don’t necessarily agree with, but I think that we will see the Aussie dollar start to head higher, and people start to see an attraction.
MARK GARDNER
Particularly in, we have the largest, mining sector to invest in in the world, essentially. We’ll see those inflows start to come in, the Aussies start to be propped up when we see a recovery in China, which there has been stimulus so far over the last sort of 12 or 6 to 12 months, 6 months particularly, but we haven’t seen a massive effect as yet. But as that starts to get traction and the trade wars, etc. start to get sorted out, I would expect the Aussie dollar to head higher.
MARK GARDNER
And piggyback that Chinese recovery with our mining sector.
RICARDO GONÇALVES
OK, so we’re at the start of a new financial year. Can we now focus on the equities market? How are you feeling as an investor going into the next 12 months, and what do you see as the key market-moving events of the financial year 26?
MARK GARDNER
Well, I think as an investor, you’d be overjoyed with the market here. It’s an absolute result considering where we were. It’s the fastest bounce out of a technical bear market, um, which is down technically it’s down 20%, triggers a bear market. I don’t think we’ve ever seen a recovery this, well, we’ve never seen a recovery this fast, certainly nowhere near in this period of time. So as an investor, I’d be very, very happy. Um, as a realist, I’ve got to say there is a lot going on, and I think Trump’s ability to,
MARK GARDNER
have an endless flow of white noise news stories from Iran-Israel conflict to the big beautiful Bill. Everything gets a name; he plays the media and the media cycle very well. But I think that all of these issues, like there are no trade deals done as yet, that um deadline comes up in, I think, 8 days, on July 9th.
MARK GARDNER
effectively we’ve only had 2 or 3 trade deals done, um, despite there being talk from the US government about there being a deal done with China. China’s been very quiet on it, so I’m not entirely sure how, you know, how solid that trade deal really is or whether that’s just PR from the US government, but we’ve effectively had a, you know, the big signing of a deal with the UK, but since Brexit, the UK has been desperate to sign a trade deal with anyone.
MARK GARDNER
So, I, really think that that they’ve got a significant job ahead of them, and I think what he’s what Trump and the Trump administration is trying to do at the moment is just get this big beautiful bill through, which might, which he’s finding resistance for because it actually worsens the debt.
MARK GARDNER
But once he gets that through, I think you’ll start to see the arbitrary threats start to surface again, like we saw with Canada, a couple of days ago, when they, when they tried to take on that, um, those digital taxes, where essentially those Mag 7 companies, that essentially do business all over the world, funnel their profits back to tax havens and don’t effectively contribute to the places where they’re dealing, so,
MARK GARDNER
You know, that, I think Australia was at the forefront of trying to um pioneer that policy, you know, you deal here, you pay here, but I think, you know, I think we’re in for a very large week next week as Trump starts to heat up that, you know, those trade deal negotiations again.
RICARDO GONÇALVES
So with all of that in mind, what are you telling your clients right now and where do you see the opportunities for investors?
MARK GARDNER
I’m telling my clients to be cautiously optimistic. At this point in time, I think there are still sectors of the market that are still doing, that are still going to do very well. Um, with, there are some very clear policy changes from Trump and there’s some very clear policy changes.
MARK GARDNER
In sectors like the energy sector, where we’ve seen the likes of 10 or 20 deals done um by Microsoft, Apple, Amazon, Meta, etc. and even the state of New York is building its first nuclear power plant in over 20 years. So I think the thematic of AI and the data centres that need to power that AI capacity
MARK GARDNER
It’s a national security issue for governments globally, because the race to be first and at the cutting edge of that is going to be a high priority from a national security point of view, as we saw with the chipboards back in the 80s and 90s.
MARK GARDNER
And, and things like defence as well, Trump’s ability to, or sorry, Trump’s desire for there to be a user pay system and get Europe to start funding NATO more, etc. will start to benefit as start to benefit defence and military spending, cause we, I think the latest estimates are for a 1% increase um of global GDP in spending on military over the coming 2 or 3 years.
MARK GARDNER
And that is a significant amount of money that’s going to be, obviously governments that will want to spend in their own backyard, so instead of the US just being the defender of the world, you’ve got the likes of Bay Systems in the UK, Tails in France, Leonardo in Italy.
MARK GARDNER
You’ve got the likes of, you know, Druni and A, um, Austal here, all seeing that increased military spending being funnelled. So, I think those two thematics will do very well, and the AI thematic will continue to do well. However, the rest of the broader market, I think, is probably in for a little bit of a shock as we come into what is seasonally the worst quarter for equity markets in the year.
RICARDO GONÇALVES
That’s Mark Gardner there from MPC Markets. Don’t forget to give this uh podcast, rating or a review on Apple Spotify, Apple Podcasts, Spotify is what I’m trying to say also, give it a subscribe if you want to be alerted whenever the podcast comes out.
RICARDO GONÇALVES
This SBS on the money stream is provided for informational purposes only. The content in this stream should not be understood as constituting advice or a recommendation. It is not personal advice, and it does not consider your personal circumstances or objectives. You should contact a licensed professional before making any financial decision.
SPEAKER 1
This SBS on the Money podcast is provided for informational purposes only. The content on this podcast should not be understood as constituting advice or a recommendation. It is not personal advice and does not consider your personal circumstances or objectives. You should contact a licensed professional before making any financial decision.
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