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Australia

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Updated 19 Sep 2026 2,788 Indicators

Market Overview - September 2026 Economic Summary

Australia's Economy: Stalled Per Capita Growth Meets a Bottlenecked Boom

Australia's economy presents an exercise in optical illusion. Aggregate GDP climbed to $699.5bn in the June quarter of 2026, yet individual prosperity ground to a near-halt as per capita output crawled at 0.7%. While headline activity appears insulated, the engine room is seized by friction. A construction revival collides with acute completion bottlenecks, sticky inflation at 3.5% keeps the central bank unyielding, and regional homeowners outpace capital city peers.

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GDP & Economic Output

Australian GDP hits $699.5bn in June 2026 as per capita growth slows to 0.7%
Australian GDP reached $699.5bn in the June Quarter of 2026, rising 2.1% year-on-year. Growth remains positive but subdued, with rolling annual output reaching $2.78t. Per capita output grew just 0.7% to $25,051, diluted by population growth. Construction grew 4.2% against its 0.9% decade average, while Health lagged at 1.3%.

Australian GDP totalled $699.5bn in the June Quarter of 2026, reaching a combined $2.78t over the rolling year. Year-on-year GDP growth was 2.1% for the quarter, while annual output grew 2.3%. Economic momentum remains positive but subdued, reflecting a moderating growth trajectory across the national economy.
Quarterly GDP per capita stood at $25,051 in the June Quarter of 2026, recording year-on-year growth of 0.7%. While headline GDP grew 2.1%, per capita GDP grew just 0.7%, as population growth diluted gains per person. This divergence reveals that overall economic expansion is primarily volume-led, with individual living standards and per-person prosperity improving at a slower rate than the headline figure suggests.
Sector trends highlighted divergent conditions across key industries. Construction was the standout performer, growing 4.2% compared to its 10-year average of 0.9% (+3.3 percentage points), followed by Financial Services, which grew 4.8% against a 10-year average of 2.5% (+2.3 percentage points). In contrast, Health was the primary drag on economic output, recording growth of 1.3%, which fell 3.6 percentage points below its 10-year average of 4.9%.
Construction Output
+4.2%
+3.3pp vs 10yr avg (0.9%)
Rising
Financial Services Output
+4.8%
+2.3pp vs 10yr avg (2.5%)
Rising
Health Output
+1.3%
-3.6pp vs 10yr avg (4.9%)
Falling
GDP per Capita (Qtr)
$25,051
+0.7% YoY (Jun-26)
Rising

Population & Migration

Population reached 27.9 million in March 2026 as migration growth slowed.
Australia's population reached 27.9 million in March 2026, growing 1.4% over the year. Overseas migration growth slowed to -5.6%, falling 9.7 percentage points below its 10-year average of +4.1% as inflows normalised. Western Australia (+2.1%) led state population growth, while Tasmania (+0.6%) lagged.

Australia's population reached 27.9 million as at March 2026, adding 392,400 persons (1.4%) over the year. Population growth has slowed from earlier peaks, normalising after the post-COVID surge in arrivals. While headline expansion remains steady, annual momentum has eased across both net overseas arrivals and natural increase.
Annual population growth comprised 292,100 persons from overseas migration and 100,300 persons from natural increase (births minus deaths), while interstate migration netted to zero nationally. Overseas migration was the standout below-average component, with annual growth of -5.6% falling 9.7 percentage points below its 10-year average of +4.1%. Natural increase also contracted 3.6% over the year. Despite this deceleration, overseas migration accounted for the bulk of total population growth.
State-level dynamics showed wide variation in annual population growth rates. Western Australia (+2.1%), Victoria (+1.6%), and Queensland (+1.6%) recorded the fastest population growth, while New South Wales (+1.1%), South Australia (+1.0%), and Tasmania (+0.6%) registered the slowest expansion. In overseas migration, annual growth was strongest in the Australian Capital Territory (+17.8%), Queensland (-1.3%), and Tasmania (-2.9%), whereas South Australia (-9.8%), Victoria (-8.7%), and the Northern Territory (-6.2%) recorded the sharpest contractions.
Overseas Migration (Annual)
292.1k
-5.6% YoY vs 10yr avg +4.1% (-9.7pp)
Falling
Total Population
27.9 million
+1.4% YoY as at Mar-26
Rising
Natural Increase (Annual)
100.3k
-3.6% YoY as at Mar-26
Falling
WA Population Growth
+2.1%
Fastest growing state YoY
Rising

Development Activity

Approvals and starts expand as completions reveal a delivery bottleneck
Australia recorded 206,300 dwelling approvals in the year to July 2026, up 8.8% YoY (10.3pp above its 10-year average). Commencements rose 12.1% to 197,500 (March 2026), but completions fell 3.8% to 172,900, revealing an acute delivery bottleneck. State growth was led by the ACT (+39.4%) and QLD (+22.4%), while VIC approvals declined 0.6%.

A total of 206,300 dwellings were approved in Australia in the year to July 2026, representing an 8.8% annual expansion. This annual growth sits 10.3 percentage points above the 10-year average decline of 1.5%, indicating approvals are recovering from previous cyclical lows. Growth was balanced across sectors, with detached house approvals increasing 9.0% (8.8 percentage points above the decade trend) and attached dwellings increasing 8.6% (12.1 percentage points above trend), marking an established turnaround across headline residential planning.
Analysis of the three pipeline stages points to an acute completion bottleneck. Annual commencements reached 197,500 in the year to March 2026 (+12.1% YoY, 13.8 percentage points above average), showing solid conversion from approvals to site starts. However, completions fell 3.8% to 172,900 (-2.8 percentage points below average). At 6 completions per 1,000 people versus the 10-year average of 7, physical handovers are lagging behind commencements, further pressured by a 4.7% contraction in completed houses.
Across the states, annual approvals growth was fastest in the ACT (+39.4%), the NT (+24.6%), and QLD (+22.4%), while VIC was the only state to contract (-0.6%). Commencements saw a similar distribution, led by the ACT (+95.4%), QLD (+19.8%), and SA (+15.4%), compared with subdued gains in VIC (+1.6%) and TAS (+1.3%). In commercial activity, retail building value grew 11.1% (7.8 percentage points above its 10-year average), whereas office building value contracted 0.7% (7.0 percentage points below average).
Dwelling Commencements (Annual)
197.5k
+12.1% YoY (13.8pp above 10yr avg)
Rising
Dwelling Approvals (Annual)
206.3k
+8.8% YoY (10.3pp above 10yr avg)
Rising
Dwelling Completions (Annual)
172.9k
-3.8% YoY (2.8pp below 10yr avg)
Falling
Retail Building Value
+11.1% YoY
7.8pp above 10yr avg
Rising

Housing Market

Regional housing outpaces capitals as affordability curbs sales.
Capital city house prices reached $1,090,000 in Jun-26, up 5.5% over the year. Regional house prices outpaced capitals with 8.9% growth, above the 10-year average of 6.9%. Capital price growth was strongest in NT (+21.4%) and weakest in NSW (-2.1%). Capital house sales fell 3.3%, signalling moderating turnover.

The median house price in capital cities reached $1,090,000 in Jun-26, up 5.5% over the year, while capital attached dwelling prices reached $712,000, up 3.6%. By contrast, regional house prices reached $745,000, up 8.9% over the year, exceeding their 10-year average annual growth of 6.9%. Regional attached dwellings also rose 9.3%, outpacing the 10-year average of 7.3%. Growth has moderated across capital cities amid declining transaction volumes, whereas regional price momentum accelerated above historical benchmarks.
Capital city attached dwellings are priced at 6.35x annual household income, sitting 16.3% below the 10-year average of 7.59x. At 6.35x income, attached dwellings remain moderately unaffordable, though affordability is improved relative to the decade benchmark. By contrast, regional attached dwellings sit at 6.27x annual household income, 8.5% above the 10-year average of 5.78x. This demonstrates that regional affordability has deteriorated compared to historical norms, placing greater strain on household budgets outside the major capital cities.
Capital city house sales volumes fell 3.3% over the year, trailing the 10-year average growth of 0.2%. Conversely, regional attached sales grew 4.7%, outpacing the 10-year average of 2.1%. Across capital cities, annual house price growth was strongest in NT (+21.4%), QLD (+18.8%), and WA (+18.8%), while NSW was weakest at -2.1%, followed by VIC (+1.2%). In attached dwellings, WA led (+21.7%) and VIC lagged (-2.2%). Median capital house prices range from $1,490,000 in NSW to $750,000 in TAS.
Attached Price to Income Multiple - Regional
6.27x
+8.5% vs 10yr avg (5.78x)
Rising
Attached Price to Income Multiple - Capitals
6.35x
-16.3% vs 10yr avg (7.59x)
Falling
House Price (Regional)
+8.9%
+2.0pp vs 10yr avg (+6.9%)
Rising
House Sales Volume Capital Cities
-3.3%
-3.5pp vs 10yr avg (+0.2%)
Falling

Housing Finance

Housing finance hits $99.0bn as investor credit outpaces owner-occupiers
Housing finance commitments reached $99.0bn in Jun-26, up 6.6% year-on-year as lending expansion continued. Investor credit grew 7.9%, exceeding its 10-year average of 5.9%. Investor new-build lending was a standout at 68.1% above average. Tasmania (+28.3%) led state growth, while New South Wales (+1.3%) lagged.

Housing finance commitments totalled $99.0bn in Jun-26, up 6.6% compared to a year ago. Commitments have recovered from earlier cyclical lows as lending expanded across dwelling purchases. Activity remains supported by rising established home values, even as borrowing capacity faces headwinds from lender-led variable mortgage rate increases ahead of the September RBA cash-rate meeting. The ongoing expansion indicates sustained buyer demand, though elevated interest rate levels continue to restrain credit volumes relative to previous cyclical peaks.
Owner-occupier lending totalled $60.7bn (61.3% of total), while investor lending reached $38.3bn (38.7% of total). Owner-occupier lending grew 5.8% over the year while investor lending grew 7.9%. Investor lending growth exceeded its 10-year average of 5.9% by 2.0 percentage points. Investors account for 38.7% of new lending, indicating that investor participation is driving market momentum. Stronger investor appetite reflects tight rental vacancies, whereas owner-occupiers face higher borrowing and serviceability hurdles.
Lending for new builds (construction plus newly erected dwellings) totalled $18.0bn, while $81.0bn went to purchases of existing dwellings. New builds captured 18.2% of dwelling purchase lending, below the average since 2019 of 18.4%, showing credit for new supply lags established stock. Investor new-build lending ($7.9bn) stood 68.1% above its $4.7bn average, while owner-occupiers ($10.1bn) sat 13.8% above average. Across states, total lending growth was led by Tasmania (+28.3%) and WA (+13.5%), while NSW (+1.3%) trailed.
Investor New-Build Lending
$7.9bn
+68.1% vs historical average
Rising
Lending for New Builds
$18.0bn
+27.3% vs historical average
Rising
Housing Finance (Investor)
$38.3bn
+7.9% YoY vs 10yr avg 5.9%
Rising
New-Build Lending Share
18.2%
Below average since 2019 of 18.4%
Falling

Rental Market

National median rent reaches $636 per week, up 5.6% on a rolling-year basis
The national median rent reached $636 per week in Mar-26, or $625 on a rolling-year basis (+5.6% YoY). Market rent growth outpaced whole-stock CPI rents of 3.7%, which sits 65.2% above its 2.2% long-term average. Annual growth moderated from earlier peaks, led by Tasmania (+9.6%) while Victoria (+4.7%) lagged.

The national median rent stands at $636 per week ($625 on a rolling-year basis) in Mar-26. On a rolling-year basis, median rents grew 5.6% year-on-year, while quarterly spot growth of 5.1% points to a moderating trajectory. Dwelling demand remains firm, with the rolling-year median for a 3-bed house reaching $604 per week (+4.7% YoY), standing 33.2% above its historical average of $454 per week.
Across dwelling types, the national rolling-year median for a 3-bed house stands at $604 per week (33.2% above its $454 average), while 4-bed houses reached $704 per week (+47.9% above their $476 baseline). Three-bed units command a median of $818 per week, sitting 34.2% above their $610 average and $214 above 3-bed houses. Across jurisdictions, rolling-year medians range from $709 per week in New South Wales to $513 per week in Tasmania, representing a $196 per week geographic spread.
Across the states, rolling-year rent growth was fastest in Tasmania (+9.6%), Queensland (+7.3%), and Western Australia (+6.4%), while New South Wales (+6.1%), South Australia (+5.9%), and Victoria (+4.7%) grew more slowly. Victoria's figures are the latest published (September 2025 quarter); the national series carries Victoria forward until DFFH publishes. Market rent growth of 5.6% outpaces whole-stock CPI Rents (+3.7%) and overall CPI (+4.6%), with both inflation measures tracking above their 10-year averages of 2.2% and 3.0%.
CPI Rents Growth (YoY)
3.7%
+65.2% vs 10-year average (2.2%)
Rising
CPI All Groups Growth (YoY)
4.6%
+55.8% vs 10-year average (3.0%)
Rising
4-Bed House Rent (Rolling Yr)
$704/wk
+47.9% vs 10-year average ($476/wk)
Rising
3-Bed Unit Rent (Rolling Yr)
$818/wk
+34.2% vs 10-year average ($610/wk)
Rising

Monetary & Financial Conditions

RBA holds cash rate at 4.35% with borrowing rates and yields above average
The RBA cash rate was held at 4.35% in September 2026, sitting 2.20pp above its 10-year average of 2.15%. The rate is up 75bp over the year following 75bp of tightening since January 2026. Two-year bond yields stand 2.30pp above average at 4.57%, while variable mortgage rates sit at 6.80%. Policy rates have remained flat for 5 consecutive months.

The RBA cash rate stands at 4.35% as at September 2026. This is 2.20pp above the 10-year average of 2.15%. Over the year, the cash rate is up 75bp. The cash rate has been on hold for 5 months following 75 basis points of hikes, representing 75bp of tightening since January 2026.
As at August 2026, the owner-occupier variable mortgage rate is 6.80%, representing a 245bp spread over the cash rate, with the three-year fixed rate for owner-occupiers at 6.74%. Over the year, variable rates have increased by 75bp and fixed rates by 122bp. Mortgage holders face rates 1.62pp higher than the 10-year average of 5.18% on variable loans, while three-year fixed rates are 2.08pp above the 10-year average of 4.66%.
The 2-year government bond yield stands at 4.57%, sitting 2.30pp above its 10-year average of 2.27%. The 10-year government bond yield is 5.02%, which is 2.09pp above its 10-year average of 2.93%. The curve is positive, the 10-year yield sitting 45bp above the 2-year.
Two-Year Bond Yield
4.57%
2.30pp above 10yr avg of 2.27%
Rising
RBA Cash Rate
4.35%
2.20pp above 10yr avg of 2.15%
Stable
Ten-Year Bond Yield
5.02%
2.09pp above 10yr avg of 2.93%
Rising
3-Year Fixed Mortgage Rate
6.74%
2.08pp above 10yr avg of 4.66%
Rising

FX Rates & Commodities

AUD rises to US$0.7200 in August 2026 as trade-weighted index gains 9.4%.
The Australian dollar stood at US$0.7200 in August 2026, up 10.8% over the year. The trade-weighted index reached 66.20, up 9.4% over the year and 6.6% above its 10-year average of 62.09. Bilaterally, the currency sat 29.6% above its 10-year average against the Japanese yen. Rural commodity prices rose 11.9% over the year, while mining growth moderated to 4.9%.

The Australian dollar stood at US$0.7200 in August 2026, up 10.8% over the year as the currency moved higher across the twelve-month period. The trade-weighted index stands at 66.20, up 9.4% over the year. The TWI is 6.6% above its 10-year average of 62.09, reflecting broad-based strength across the basket of major trading partners.
Against the Japanese yen, the Australian dollar recorded its widest historical gap, standing at 114.5400 in August 2026, 29.6% above its 10-year average of 88.36. European trade crosses also gained, with the AUD/EUR standing at 0.6200 in August 2026, up 10.7% over the year, alongside a 10.8% annual rise against the US dollar to 0.7200. These higher levels against key trading partners lowered import costs while reducing the price competitiveness of Australian outbound shipments.
Commodity price performance showed a divergence between sectors. The rural commodity price index grew 11.9% over the year, sitting 6.7pp above its 10-year average growth rate of 5.2%. In contrast, mining commodity price growth slowed to 4.9%, tracking 2.7pp below its 10-year average growth rate of 7.6%. This uneven performance shaped terms of trade over the period. While rural prices supported the Australian dollar's 10.8% annual rise to US$0.7200 in August 2026, slower mining growth curbed broader export earnings.
AUD/JPY
114.5400
29.6% above 10yr avg of 88.36
Rising
Commodity Price Index - Rural AUD
+11.9%
6.7pp above 10yr avg of 5.2%
Rising
Trade Weighted Index
66.20
6.6% above 10yr avg of 62.09
Rising
Commodity Price Index - Mining AUD
+4.9%
2.7pp below 10yr avg of 7.6%
Falling

Equities & Superannuation

ASX 200 capital growth slows to 1.1% as superannuation assets reach $4.75t.
The ASX 200 closed at 9,076 points as at August 2026, delivering 1.1% capital growth over the year. This annual gain sits 4.2pp below its 10-year average growth of 5.3%. Superannuation assets reached $4.75 trillion in June 2026, rising 9.6% over the year. Total market capitalization of $3.41 trillion grew 2.5%, easing below average.

The ASX 200 closed at 9,076 points as at August 2026, recording 1.1% capital growth over the year. This compares to average annual capital growth of 5.3%, placing performance 4.2pp below its 10-year benchmark. The All Ordinaries reached 9,271 points, up 0.3% capital growth over the year against its 10-year average of 5.3%. Total market capitalisation of $3.41 trillion grew 2.5%, easing 4.8pp below its long-run average of 7.3%. These price indices measure capital growth only and exclude dividend distributions, reflecting subdued domestic equity appreciation.
Superannuation assets total $4.75 trillion as at June 2026, up 9.6% over the year. This expansion underlines the ongoing accumulation within Australia's retirement savings pool. Alongside total asset growth, the Super Performance Index reached 393.4 points as at June 2026, advancing 8.7% over the year. As a cumulative return index measuring investment performance rather than dollar balances, the measure reflects sustained compound earnings across superannuation portfolios. The sector continues to provide capital depth, supported by solid contribution flows and investment returns.
Read against historical norms, the year to August 2026 shows equity capital growth slowing well below long-term benchmarks. Annual gains of 1.1% for the ASX 200 and 0.3% for the All Ordinaries lagged their 10-year average growth rates of 5.3% by 4.2pp and 5.0pp respectively. Total market capitalisation growth of 2.5% similarly trailed its 7.3% historical average by 4.8pp amid broader cost pressures. By comparison, superannuation assets grew 9.6% over the year to June 2026, showing that retirement asset accumulation remained firmer than public equity price appreciation.
All Ordinaries
9,271
growth 5.0pp below 10yr avg of 5.3%
Falling
ASX 200
9,076
growth 4.2pp below 10yr avg of 5.3%
Falling
ASX Market Capitalisation
$3.41t
growth 4.8pp below 10yr avg of 7.3%
Falling
Super Performance Index
393.4
annual return of 8.7% over the year
Rising

Employment

Australian unemployment sits at 4.5%, remaining below its 10-year average
In July 2026, Australia's unemployment rate rose 0.2 percentage points to 4.5%, remaining below the 10-year average of 4.8% as employment grew 1.3%. Unemployed persons grew 7.0%, well above the 10-year average decline of 0.5% as conditions moderate. Queensland recorded the fastest job growth at 1.9%, while Tasmania contracted 0.6%.

The unemployment rate in Australia stands at 4.5% as at July 2026. This is below the 10-year average of 4.8%. The unemployment rate has risen 0.2 percentage points over the year, indicating that unemployment is low but rising towards the 10-year average. Despite this upward drift, the labour market continues to demonstrate resilience, with conditions sitting slightly tighter than full employment.
Total employment stood at 14.8 million persons as at July 2026, up 1.3% over the year. Full-time employment grew 1.1% to 10.2 million persons, expanding at a slightly slower pace than overall employment. This indicates that part-time roles supported job creation over the year. Meanwhile, unemployed persons increased 7.0%, a key standout running 7.5 percentage points above the 10-year average annual contraction of 0.5%.
Across the states, performance diverged. While South Australia recorded the lowest unemployment rate at 4.1%, Queensland recorded the strongest annual employment growth at 1.9%. Victoria recorded the highest unemployment rate at 5.1%. Employment growth followed in New South Wales at 1.5% and Victoria at 1.2%, whereas Tasmania contracted 0.6%. In rate movements, Tasmania and Victoria experienced the largest rises, up 1.2 and 0.5 percentage points respectively, while South Australia saw unemployment fall 0.2 percentage points.
Unemployment Rate
4.5%
0.4pp below 10yr avg of 4.8%
Rising
Unemployed Persons
+7.0%
7.5pp above 10yr avg of -0.5%
Rising
Total Employment
14.8 million
Up 1.3% YoY to July 2026
Rising
Full-Time Employment
10.2 million
Up 1.1% YoY to July 2026
Rising

Job Advertisements

Australian job ads fell 1.7% year-on-year to 627,200 in July 2026.
Job advertisements in Australia totalled 627,200 in July 2026, moderating 1.7% year-on-year. Annual growth sits 4.1 percentage points below the 10-year average of 2.4%. Industrial ads proved resilient at +4.1%, whereas professional ads contracted 1.0%. South Australia recorded the fastest state growth at +3.3%, while Victoria declined 2.6%.

Job advertisements in Australia totalled 627,200 in July 2026, down 1.7% compared to a year ago. Annual growth sits 4.1 percentage points below the 10-year average growth rate of 2.4%. Historically, job advertising trends have led employment changes by three to six months, with the current decline across advertising preceding slower hiring conditions.
By category, professional job advertisements totalled 180,800 in July 2026, down 1.0% compared to a year ago to sit 4.0 percentage points below the 10-year average growth rate of 3.0%. In contrast, industrial job advertisements reached 132,000, rising 4.1% over the year. Industrial ads represent the standout category with positive growth, while professional advertising has cooled relative to historical averages, reflecting subdued white-collar recruitment demand.
Across the states, annual growth in total job advertisements showed South Australia (+3.3%), Western Australia (+2.9%), and Tasmania (+0.8%) leading the country. In contrast, the weakest annual performances were recorded in the Australian Capital Territory (-7.7%), the Northern Territory (-7.7%), and Victoria (-2.6%). With advertising movements historically leading employment outcomes by three to six months, this divergence highlights resilient labour demand in central and western states alongside softer conditions in the eastern states and territories.
Total Job Advertisements
627,200
-4.1pp vs 10yr avg growth (+2.4%)
Falling
Professional Job Advertisements
180,800
-4.0pp vs 10yr avg growth (+3.0%)
Falling
Industrial Job Advertisements
132,000
+4.1% YoY growth
Rising
South Australia Total Job Ads
+3.3%
Fastest state growth YoY
Rising

Wages & Earnings

Wage growth reached 3.2% in Jun-26 with full-time earnings at $2,156.
The Wage Price Index reached 161.2 in Jun-26, rising 3.2% over the year to stand 15.1% above its 140.0 ten-year average. Full-time weekly earnings rose 3.5% to $2,156 in May-26 as wage growth moderated from recent peaks. Across states, South Australia led annual growth at 3.6%, while the Northern Territory trailed at 2.8%.

The Wage Price Index stood at 161.2 in Jun-26. Wages grew 3.2% over the year to Jun-26, as measured by the Wage Price Index. At 161.2, the index sits 15.1% above its 10-year average of 140.0, marking the key above-average standout for the series. Annual wage growth has moderated from earlier peaks, indicating that the pace of wage expansion has passed its cyclical peak and stabilized at current rates.
Average weekly full-time earnings reached $2,156 per week in May-26, representing a 3.5% increase over the year. Annualised full-time earnings stood at $111,423 per year for full-time workers, up 3.8% over the twelve months to May-26. While nominal earnings expanded, elevated living costs have constrained real wage gains. Workers experienced persistent pressure on purchasing power over the year, as broader price pressures offset gains in nominal pay across household budgets.
Across the states, annual wage growth diverged from the national 3.2% pace, led by South Australia at 3.6% and Queensland at 3.4%, while the Northern Territory recorded the slowest growth at 2.8% and Tasmania at 2.9%. In weekly earnings levels, the Australian Capital Territory was highest at $2,332, above the $2,156 national average, while Tasmania was lowest at $1,904. Tasmania showed a clear divergence, holding the highest index level at 165.0 despite having the lowest weekly earnings level and second-slowest wage growth.
Wage Price Index
161.2 (+3.2% YoY)
15.1% above 10-year average of 140.0
Rising
Weekly Full-Time Earnings
$2,156 (+3.5% YoY)
National full-time benchmark in May-26
Rising
Annual Full-Time Earnings
$111,423 (+3.8% YoY)
Annualised earnings for full-time workers in May-26
Rising
Fastest State Wage Growth (SA)
+3.6% YoY
0.4 percentage points above national average of 3.2%
Rising

Household Consumption

Australian household consumption rose 4.9% to $386.6bn in June 2026.
Australian household consumption totalled $386.6bn in June 2026, up 4.9% over the year. Per capita spending reached $13,845, sitting 20.5% above its 10-year average. Growth moderated in discretionary categories, with transport down 0.7% and alcohol down 0.9%. Across the states, annual growth was fastest in the NT (+2.6%) and slowest in Victoria and NSW (+1.6%).

Household consumption expenditure totalled $386.6bn in the June quarter 2026, up 4.9% over the year according to comprehensive quarterly National Accounts data. On a per capita basis, household spending reached $13,845, reflecting a 3.4% increase over the year. This per capita level remains elevated relative to historical baselines, tracking 20.5% above its 10-year average of $11,489. The figures indicate that headline expenditure maintained expansion through the June quarter, driven by population and price effects even as per capita volumes grew at a more moderate pace.
Component trends show divergence between essential and discretionary spending amid cautious consumer sentiment. Essential expenditure on food rose 4.5% over the year to $36.6bn in the June quarter. By contrast, discretionary categories contracted and fell well below historical trends. Transport spending declined 0.7% over the year, falling 6.0 percentage points below its 10-year average growth rate of 5.3%. Alcohol consumption dropped 0.9%, trailing its 10-year average of 3.3% by 4.2 percentage points, reflecting household cutbacks on non-essential items.
State consumption growth varied across jurisdictions over the year. In total expenditure growth, the NT recorded the fastest rate at 2.6%, followed by WA (+2.4%) and the ACT (+2.3%). Growth was slowest in SA (+1.9%), NSW (+1.6%), and Victoria (+1.6%). On a per capita basis, growth was led by Tasmania (+1.5%), the NT (+1.1%), and the ACT (+1.0%). Per capita consumption growth was weakest in Queensland (+0.3%), WA (+0.3%), and Victoria, which remained flat at 0.0%. This highlights softer momentum in the larger eastern state economies relative to the territories.
Household Consumption Per Capita
$13,845
+20.5% vs 10yr avg ($11,489)
Rising
Transport Consumption Growth
-0.7%
-6.0pp vs 10yr avg (+5.3%)
Falling
Alcohol Consumption Growth
-0.9%
-4.2pp vs 10yr avg (+3.3%)
Falling
Food Consumption
$36.6bn
+4.5% YoY in Jun-26
Rising

Household Spending

Australian household spending rose 6.2% to $244.5bn in July 2026.
Australian household spending totalled $244.5bn in July 2026, rising 6.2% year-on-year as growth moderates. Annual per capita spending reached $34,660, 21.3% above the 10-year average of $28,573. Miscellaneous led component outperformance at 8.1% against its 4.5% average. Across states, NT (+10.1%) and WA (+9.0%) recorded fastest growth, while ACT (+5.0%) lagged.

Household spending in Australia totalled $244.5bn in July 2026, up 6.2% compared to a year ago as spending moderates. Across the population, expenditure stood at $34,660 per person annually, tracking 21.3% above the 10-year average of $28,573. In per capita terms, outlays reached $8,757, sitting 22.1% above the historic benchmark of $7,175. While aggregate nominal spending remains elevated, consumer patterns reflect a moderating trajectory across broader household balance sheets.
Essential spending was anchored by food, which totalled $37.8bn in July 2026 with a 5.8% annual increase. In discretionary categories, consumer patterns diverged. Miscellaneous spending was the primary standout above trend, rising 8.1% against its 10-year average of 4.5% (+3.6pp), alongside recreation, which grew 8.0% compared to a 5.0% historical average (+3.0pp). Conversely, alcoholic beverages and tobacco contracted 0.4% to $8.6bn. This divergence indicates households are selectively preserving experiences and value while paring back non-essential goods.
State performance revealed notable divergence in annual growth rates. In total spending, Northern Territory led all jurisdictions with 10.1% growth, followed by Western Australia (+9.0%) and Tasmania (+8.0%). Australian Capital Territory recorded the slowest expansion at 5.0%, with New South Wales and Victoria both tracking at 5.4%. Food spending mirrored this trend, led by NT (+9.1%) while ACT (+3.9%) lagged. As wage growth and inflation interact with eroding savings buffers, consumer confidence reflects cautious budgeting and an ongoing shift toward value.
Total Spending (Annual Per Capita)
$34,660
+21.3% vs 10yr avg ($28,573)
Rising
Miscellaneous Spending Growth
+8.1%
+3.6pp vs 10yr avg (+4.5%)
Rising
Recreation Spending Growth
+8.0%
+3.0pp vs 10yr avg (+5.0%)
Rising
Alcoholic Beverages and Tobacco
$8.6bn
YoY growth -0.4%
Falling

Inflation & Cost of Living

Australian inflation reached 3.5% in July 2026, remaining above RBA targets.
Australia's CPI (All Groups) index reached 103.1 in July 2026, rising 3.5% annually and holding above the RBA's 2-3% target band. Key components sit up to 27.8% above 10-year averages. Annual inflation was fastest in Tasmania at 4.5% and slowest in New South Wales, Victoria, and the ACT at 3.2%. Price pressures remain persistent across categories.

Inflation in Australia was 3.5% in the year to July 2026, with the headline CPI (All Groups) index reaching 103.1. Inflation remains above the RBA's 2-3% target band. Key series sit above their 10-year averages, led by a component index at 103.0 versus an average of 80.6. Across headline categories, annual inflation ranged between 3.2% and 5.0%. Price momentum shows persistence above the target band, with market participants pointing to sticky inflation risks as broader disinflation moderates.
Component indices reveal elevated price levels compared to historical baselines. The foremost standout index reached 103.0 against a 10-year average of 80.6 (+27.8%), followed by a component at 104.7 versus an 84.5 average (+23.9%) and another at 104.6 versus an 85.1 average (+22.9%). Additional pressure came from sub-indices at 103.8 (+21.0% vs 85.8) and 103.0 (+20.2% vs 85.7). Across broader baskets, annual growth varied from a high of 5.0% down to 3.2%, providing modest relative relief at the lower end without outright price deflation.
State index levels for CPI (All Groups) peaked in South Australia at 103.8, while Victoria recorded the lowest at 102.7. Annual growth was fastest in Tasmania at 4.5%, South Australia at 4.4%, and Western Australia at 3.8%, each topping the 3.5% national figure. New South Wales, Victoria, and the ACT recorded the slowest growth at 3.2%. In secondary CPI series, levels reached 106.8 in the Northern Territory, with growth led by Tasmania at 8.9% and South Australia at 8.5%. These price gains continue to erode real purchasing power across jurisdictions.
CPI (All Groups)
103.1 (+3.5% YoY)
Above RBA 2-3% target band
Rising
CPI Component (103.0)
103.0
+27.8% vs 10yr avg (80.6)
Rising
CPI Component (104.7)
104.7 (+5.0% YoY)
+23.9% vs 10yr avg (84.5)
Rising
CPI Component (104.6)
104.6
+22.9% vs 10yr avg (85.1)
Rising

Retail Trade

Supermarket turnover dominates at $145.6B as non-discretionary spending outpaces discretionary
Australia's retail landscape reflects entrenched consumer priorities toward essential spending amid cost-of-living pressures, with supermarket and grocery turnover reaching $145.6 billion annually through June 2025—up 137.3% from the September 2006 baseline of $61.3 billion. This non-discretionary category's dominance underscores households' focus on food and basic necessities even as discretionary budgets compress. The "Other Retail" category totaled $70.1 billion (up 160.6% from baseline), while electrical and electronics reached $26.2 billion (up 66.5%) and specialised food stores recorded $13.0 billion (up 79.9%). The divergent growth rates reveal sector-specific dynamics: supermarkets benefit from population growth and food inflation that mechanically lifts nominal turnover; electrical/electronics faces online competition and price deflation that constrains dollar growth despite volume increases; and specialised food captures premiumization trends as consumers trade up to artisan bakeries, butchers, and organic retailers. Retail patterns demonstrate the squeeze on household budgets—necessities claim growing wallet share while discretionary categories face volume pressure. The data encompasses both in-store and online sales, with e-commerce penetration varying dramatically by category and reshaping traditional retail economics.

Supermarket and grocery turnover reached $145.6 billion on an annual rolling basis through June 2025, representing 137.3% growth from the September 2006 baseline of $61.3 billion. This substantial nominal expansion stems from three reinforcing factors: population growth of approximately 30% over the period mechanically increased the customer base; food price inflation substantially outpaced general CPI, with fresh produce, meat, and packaged goods all experiencing multi-decade price increases; and consumption patterns shifted toward eating at home rather than dining out as restaurant prices surged and household budgets tightened. The absolute turnover figure of $145.6 billion translates to roughly $5,300 per capita annually in supermarket spending, highlighting groceries' substantial claim on household budgets. Market concentration in this sector proves extreme, with Woolworths and Coles commanding approximately 65-70% combined market share, followed by Aldi, IGA, and smaller independent operators. This duopoly structure generates ongoing political and regulatory scrutiny around pricing power, supplier treatment, and consumer choice—particularly during periods of elevated food inflation when margin expansion attracts criticism. The pandemic accelerated online grocery adoption, with click-and-collect and home delivery services now comprising an estimated 10-15% of supermarket sales compared to minimal penetration pre-2020. However, the high costs of online fulfillment—picking, packing, refrigerated transport—squeeze margins and raise questions about long-term profitability of digital grocery channels at current pricing.
Electrical and electronics retail turnover totaled $26.2 billion annually through June 2025, up 66.5% from the September 2006 baseline of $15.7 billion—the weakest growth rate among major retail categories despite technology's increasing importance in daily life. This subdued nominal growth masks dramatic volume expansion: Australian households purchased vastly more devices, appliances, and electronics over the period, but unit prices declined sharply due to manufacturing efficiency gains, technology commoditization, and intense online competition. Categories like televisions, computers, and smartphones saw 50-80% price deflation over the past two decades even as specifications improved dramatically, creating a headwind for dollar turnover growth. The "Other Retail" category reached $70.1 billion, up 160.6% from the $26.9 billion baseline—a broad bucket encompassing clothing, footwear, furniture, homewares, sporting goods, and various specialty retail segments. This category's strong nominal growth reflects both population expansion and premiumization trends in segments like activewear, furniture, and homeware where consumers traded up to higher-quality products. However, the aggregate figure conceals sharp divergence: fast fashion and discretionary apparel faced margin pressure and market share loss to online competitors, while furniture and homewares benefited from pandemic-era nesting behaviors and sustained housing market activity that drove demand for furnishings and renovations. Specialised food retail—artisan bakeries, butchers, delis, organic grocers—recorded $13.0 billion in turnover, up 79.9% from $7.2 billion, capturing the premiumization of food consumption as higher-income households sought quality, provenance, and specialty products beyond supermarket offerings.
The retail sector's compositional dynamics reveal broader shifts in consumer behavior, household budget allocation, and competitive landscapes. Supermarkets' commanding 60% share of the captured retail categories ($145.6B of ~$255B total) reflects food's non-discretionary status and limited substitution possibilities—households must eat regardless of economic conditions, providing grocery retailers with defensive earnings characteristics. The weak electrical/electronics growth despite technological proliferation demonstrates how price deflation can overwhelm volume gains, creating challenging economics for bricks-and-mortar retailers competing against online pure-plays with lower overhead structures. Amazon's entry into the Australian market intensified this pressure, forcing incumbent retailers to match prices while bearing higher cost structures—Officeworks, JB Hi-Fi, and Harvey Norman all faced margin compression as they invested in online capabilities and price competitiveness. The rise of specialised food retail signals income polarization: higher-earning households increased spending on premium food experiences and artisan products, supporting independent retailers and niche chains, while cost-conscious households concentrated spending at discount supermarkets and focused on value. Per-capita retail spending growth substantially lagged income growth over the period, indicating declining retail share of household budgets as housing costs, utilities, and services claimed increasing portions of disposable income. Looking forward, retail faces persistent headwinds from elevated mortgage servicing costs that suppress discretionary spending, ongoing e-commerce penetration that advantages low-cost operators, and potential consumption weakness if labor market softening reduces income growth. The essentials-focused spending pattern appears entrenched, with supermarkets likely maintaining dominance while discretionary categories face volume pressure absent meaningful real income growth that restores household purchasing power.
Supermarket and grocery turnover
$145.6B annually
+137.3% from 2006 baseline, dominates retail landscape
Strong
Electrical/electronics growth
+66.5% since 2006
Weakest growth despite tech proliferation—price deflation overwhelms volume gains
Constrained
Other retail category
$70.1B annually
+160.6% from baseline, but conceals divergence between winners and losers
Mixed
Specialised food retail
$13.0B annually
+79.9% from baseline, premiumization trend among higher-income households
Rising

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