Weekly market wrap up

New Zealand’s housing market remained in patient mode in July, with prices relatively steady but buyers taking longer to make their move. The national median sale price was $760,000, down just 0.7% from a year earlier, while sales fell 10%. That decline looks less dramatic in a longer-term context, with July sales still sitting around the historical midpoint for the month across REINZ’s 35 years of records. What has changed more noticeably is the pace. Properties took a median 50 days to sell, two days longer than last July and the fifth-slowest July on record. Regional differences also remained pronounced, with parts of the South Island continuing to outperform several northern markets. The housing market is moving, but nobody appears to be in much of a hurry. 

US inflation cooled a little further in July, with annual headline CPI easing to 3.4% from 3.5% in June. Core inflation, which strips out food and energy, also softened to 2.5%. Beneath the headline, the picture remained mixed, with lower energy prices helping pull inflation down while shelter continued to account for much of the monthly increase. The result extended the recent easing in inflation after a more volatile few months earlier in the year, although price pressures have not disappeared altogether. For markets, the release was notable less for what happened and more for what did not - the headline figure landed broadly in line with expectations and delivered few unwelcome surprises. 

Australia's central bank opted for patience this week, holding the cash rate at 4.35% after three increases so far in 2026. Inflation remains the main headache, with the RBA expecting it to take until early 2028 to return to the midpoint of its 2-3% target range. At the same time, the effects of tighter monetary policy are becoming more visible. Spending growth is slowing, the housing market has lost momentum, and labour market conditions have eased. The RBA is therefore giving its earlier rate rises time to work, reflecting the familiar reality that changes in interest rates can take time to flow through the economy. These dynamics are hardly unique to Australia, but they matter to New Zealand given the close trade, tourism and financial links between the two economies. 

New Zealand’s inflation outlook offered the RBNZ a small dose of reassurance this week, with its latest Survey of Expectations showing that medium-term inflation expectations remain relatively contained. Two-year inflation expectations eased to 2.34%, down from 2.53% previously, while one-year expectations fell more sharply from 3.41% to 2.60%. That is notable given annual inflation has recently moved above 4%, helped by higher oil prices and other near-term cost pressures. The survey suggests respondents appear to view much of that lift as temporary rather than the start of another persistent inflation problem. Five- and ten-year head measures edged slightly higher, but the moves were modest.