Category: Market Outlook

VIDEO – JULY 2026
Housing declines are gaining momentum, inflation remains elevated, and the RBA appears firmly on hold.
In this July update, Stephen Koukoulas, Zagga’s Economist in Residence, examines falling house prices, shifting demand dynamics, and a softening economic backdrop. He also explores the outlook for inflation, business investment and what it may mean for interest rates in the months ahead.

The RBA held official interest rates steady at its 16 June meeting and signaled that the current level of rates is appropriate to see inflation trend lower over the medium term. Encouragingly, the RBA is of the view that inflation is on track to decelerate towards its 2 to 3 per cent target, which is in line with its most recent forecasts from May.

The RBA highlighted reasons why inflation is likely to decelerate. Resolution to the US-Iran conflict and with that, lower oil prices, will be critical to lower global and domestic inflation. The RBA also noted a higher than forecast unemployment rate and falls in house prices in some cities will help to dampen inflation.

In his latest update, Stephen Koukoulas, Zagga’s Economist-in-Residence, highlights a period of economic uncertainty shaped by policy ambiguity, cautious sentiment, and uneven growth dynamics.

The recent Federal Budget has introduced a degree of uncertainty, particularly around proposed changes to capital gains tax. While other policy measures appear relatively settled, the lack of clarity around potential carve‑outs is contributing to hesitation across business and investment decision‑making.

Australia’s Federal Budget has triggered wide‑ranging debate across markets, households and the property sector. In a recent investor webinar, Stephen Koukoulas, Zagga’s Economist‑in‑Residence, joined Zagga CEO & Co‑Founder Alan Greenstein and Executive Director Frank Hageali to unpack what the budget means for inflation, interest rates, housing, and the real estate private credit landscape.

The defining issues of the past month centre on further tightening in economic conditions and a series of proposed tax amendments to negative gearing and capital gains tax. Worryingly, the unemployment rate climbed to a four and half year high of 4.5 per cent.

The Australian economy is navigating a challenging period, marked by higher interest rates, elevated energy costs and growing signs of strain across confidence, spending and housing.

In his latest Two Minutes for Zagga update, Stephen Koukoulas outlines the key developments shaping economic conditions and what they may mean for households, businesses and property markets as the year progresses.

Significant downside risks to economic growth and higher inflation – that is the combination of news unfolding in the Australian economy over the past month.

The volatility in sentiment and economic conditions as the result of developments in the Middle East war is making it difficult for policy makers, business, governments and householders to plan ahead with any degree of confidence. Add to this the interest rate hikes from the RBA in February and March, and the expectation of more to come, and the negativity surrounding sentiment is understandable.

Stephen Koukoulas opens his April update by highlighting the dominant forces now shaping the economy and financial markets: oil prices, petrol supply, inflation, and interest rates.

These factors are central to the Reserve Bank’s thinking as it prepares for upcoming policy decisions.

Stephen Koukoulas opens his March update following another interest rate increase from the Reserve Bank of Australia (RBA), with rates rising for the second consecutive month. The February and March hikes have now taken the Official Cash Rate (OCR) to 4.1%, with inflation firmly at the centre of the RBA’s decision‑making.