Updated
Updated · Mortgage Professional · Jul 6
CBA Cuts Australia 2026 GDP Forecast to 1.5% as Housing Slump Overtakes Iran Shock
Updated
Updated · Mortgage Professional · Jul 6

CBA Cuts Australia 2026 GDP Forecast to 1.5% as Housing Slump Overtakes Iran Shock

1 articles · Updated · Mortgage Professional · Jul 6

Summary

  • CBA lowered its end-2026 GDP growth forecast to 1.5%, saying a weakening housing market has become a bigger drag on Australia than the earlier Iran conflict.
  • Sydney home values fell 1.2% in June and 3.2% over the quarter, while Melbourne dropped 1% and 2.6%; auction clearance rates have stayed below 50% for five straight weeks.
  • Canberra’s June tax overhaul cut capital-gains and negative-gearing incentives for investors, and a new ban on SMSF borrowing for residential property has further chilled buyer sentiment and dwelling investment.
  • Oil averaging $97 a barrel instead of CBA’s earlier $120 scenario helped cap its inflation peak forecast at 4.1% rather than 5.4%, but the bank still expects the RBA to hold rates through 2026.
  • By 2027, CBA sees unemployment peaking at 4.8% before growth recovers to 2% on stronger business investment, including a data-centre buildout estimated at $150 billion to $220 billion.

Insights

Can Australia's tech and defence boom truly offset a nationwide property downturn and support the economy?
Will rising wages or falling house prices ultimately dictate the Reserve Bank's next move on interest rates?
Has Canberra's housing market intervention inadvertently triggered the economic slowdown it sought to avoid?