Inflation continues to decline
The ABS released the latest monthly inflation figures, which dropped from 5.4 per cent in June to 4.9 per cent in July.
This is of course now a long way down from the peak of 8.4 per cent in December as supply chains and the labour supply normalise.
The most significant contribution to inflation over the past year has been the ongoing explosion in new home building costs, but this should now trend towards zero from here (the growth in rents will also slow from here).
Despite some extreme increase in electricity prices, the result was overall materially softer than market expectations.
Indeed, on a 3-month annualised basis the monthly inflation indicator has dropped to just 2.7 per cent, as highlighted by NAB:
There are some big readings to drop off the annual inflation figures over the next 6 months, and it's good to see interest rates doing their thing and inflation moving in the right direction.
Building approvals soggy
Building approvals fell by 8 per cent in July, driven by a 16 per cent decline in attached dwelling approvals.
It looks like Greater Brisbane might be ready for a much-needed increase in building approvals, but there's not much happening elsewhere.
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Detached home approvals continue to trend lower across most capital cities, to be 17 per cent lower over the year.
Overall, total building approvals were still very soggy at just 12,668 in July, which is going to mean a significant undershoot in apartment supply versus record population growth.
There was another big increase in non-residential approvals, which is taking some of the capacity away from the homebuilding market.
