New home values data out: Australia’s fall in home values has spread well beyond Sydney and Melbourne.
According to Cotality, national home values fell 0.9% in August, while 93% of capital-city suburbs recorded falls through winter.
Welcome to Talking Business, a podcast produced in Melbourne Australia, built on the traditional lands of the Kulin Nation. The podcast is available on the Acast site, my own website, the Apple podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at businessacumen.biz
I am Leon Gettler. My job is review and monitor the week’s news in business finance and economics. I bring it all to you every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 31 in our series for 2026 and today’s date is Friday September 4.
First, I’ll be talking to Internal Consulting Group CEO David Moloney. His company ranked among the world’s top 200 consulting firms by Forbes and Statista. We’ll talk about the new platforms and pillars that attract customers – think Google, Apple and Microsoft – the importance of customer engagement and the need for companies to develop life cycle and health plans for their customers.
And I’ll be talking to AMP Capital chief economist Shane Oliver about the latest profit reporting season, Australia’s inflation rate and the prosect of more rate hikes.
But first let’s talk to David Moloney.
So what’s happening in the news?
Natural disasters are set to cost the world about $450 billion a year — and less than half of that is insured, according to new Verisk research. That leaves roughly $279 billion in uninsured losses in a typical year. Why? Climate change, more building in risky areas, and rising construction costs. Meanwhile insurers are getting pickier — tightening policies, exiting risky states like California and Florida, and leaving homeowners to fall back on “last resort” state schemes. Some striking examples: Myanmar’s earthquake caused $12 billion in damage but insurers covered under $100 million. Texas’s July floods topped $1 billion, mostly uninsured. Even in the LA wildfires, about 35% of affected homes had no coverage. And despite rising losses industry-wide, insurers are posting strong profits — raising premiums while cutting exposure to riskier customers. Critics call it a pattern: retreat from risky markets, shift the burden onto governments and individuals, then raise rates on everyone else.
Sydney home values have dropped almost $100,000 since their February peak — that’s a 7.1% slide, according to Cotality. And it’s not just Sydney: prices fell across every major capital city last month, with Melbourne and Canberra down 1.1%, Brisbane down 1%, and Adelaide and Perth off 0.8%. Blame a combination of three rate rises this year and Labor’s changes to negative gearing and capital gains tax on investment properties. Cotality’s research director says 93% of capital city suburbs are now down in value over the past three months, and he doesn’t expect things to bottom out this spring. Not everyone agrees on the outlook though — HSBC and the big banks think the pain continues for months yet, while Barrenjoey and Ray White reckon a drop in new listings could actually push prices back up by year’s end.
New data is starting to clash with the rosier picture we’ve been getting from official spending figures. Retail gross profits fell 5.2% over the June quarter — the biggest drop since early 2024 — and credit growth for housing and personal borrowing is s lowing too. That lines up with what retailers like Harvey Norman and JB Hi-Fi have been saying all earnings season: conditions on the ground feel worse than the headline numbers suggest. Harvey Norman’s Gerry Harvey put it bluntly — “I don’t see how it’s going to get better.” Some economists think falling house prices are now feeding into this, making people feel poorer and spend less — what one analyst called a “negative wealth effect.”
Treasurer Jim Chalmers says AI could be the productivity breakthrough Australia’s been missing for the better part of two decades — but only if we adopt it as fast as the US does. A new Treasury briefing note says most of the economic upside won’t come from building AI here, but from importing and embedding overseas technology into local businesses. There’s a projected $150 billion data centre investment boom coming by 2030, which could actually push up construction costs and inflation in the near term. Treasury’s also flagging real risks — AI-enabled attacks on infrastructure and banks, US-China tensions, and market volatility if investor confidence in AI stocks turns. It’s all a preview of the government’s Intergenerational Report, due out later this month.
New RBA research is pushing back on the government’s line that inflation is mainly an overseas problem. The bank’s own analyst found that since 2023, wage costs and housing costs have become the biggest drivers of consumer price growth — more so than import prices or business margins. That matters because trimmed mean inflation is still stuck at 3.6%, well above the RBA’s target, and Treasurer Jim Chalmers has been pointing to global oil prices and Middle East conflict as the culprit. But if it’s really domestic wage growth pushing prices up, that’s a much harder problem for the RBA to fix — and CBA’s chief economist reckons households are just absorbing the higher costs rather than pulling back spending, which is delaying the effect of the three rate hikes already this year. Minimum and award wages are about to jump too, so economists are now tipping another rate rise in September.
Federal headcount is closing in on 200,000, up 23% in three and a half years — that’s roughly 28 new public servants a day, largely driven by defence hiring and the NDIS nearly doubling in size. Here’s the sting: the budget assumes this cost will actually shrink as a share of GDP over coming years, which is a rosy assumption both major parties have leaned on for two decades to make the numbers look better. Independent budget analysts say if costs just stayed flat at current levels, that’s an extra $33.6 billion in spending the budget isn’t accounting for — which would wipe out the projected improvement in the bottom line entirely. Add in optimistic tax revenue assumptions from bracket creep, and you’ve got a budget that looks stronger on paper than it probably is in reality.
Defence Minister Richard Marles is off to San Francisco, framing Australia’s AI position as the biggest sovereignty moment since World War II. He’s chasing a deal to make Australia a “second home” for Anthropic, and says the window to lock it in is months, not years. The vision: AI eventually running submarines, F-35s, and battlefield drone data for troops. The sticking point in negotiations is compensating Australian media and musicians for their content being used to train AI models — Marles insists creatives won’t be sold out. He’s also using the trip to defend AUKUS, pushing back on claims the submarine program is blowing out the defence budget.
ASIC has called out insurers over how they handle home damage claims — specifically the trend of offering cash settlements instead of doing the repairs directly. Looking at Cyclone Jasper claims in Far North Queensland, the regulator found over half of cash offers were based on a single quote, and most of those came from an insurer’s “preferred” supplier — who typically low-balls quotes to win repeat business from the insurer. Problem is, an ordinary homeowner trying to get those same repairs done themselves won’t get anywhere near that discounted rate, so they can end up out of pocket. ASIC wants insurers to build in a buffer on top of quotes to cover this gap, and is urging homeowners to question how their settlement figure was actually calculated.
Big news for Australia’s renewable energy sector — the eastern seaboard just landed its largest wind farm investment in over two years, and it’s a genuine shot in the arm for a sector that’s been struggling. Danish investment giant Copenhagen Infrastructure Partners has bought the Gawara Baya wind farm in North Queensland — we’re talking up to 68 turbines plus battery storage, a $1.7 billion project generating 408 megawatts. Construction starts imminently. To put that in perspective, this is the biggest eastern Australia wind project to lock in financing since 2024. Only three other wind projects got the green light in the past financial year. Why does this matter? Australia’s actually hitting some good milestones — renewables and batteries recently supplied more than half the main grid’s power over a three-month stretch, and over half the remaining coal plants on the eastern seaboard are set to retire within a decade. But — and it’s a big but — the rollout is way behind schedule. The government wants 82% renewables by 2030, which needs 8-9 gigawatts of new solar and wind coming online every year. Reality check: the best year on record only hit about 4 gigawatts. Wind specifically is in trouble. Solar’s gotten cheaper thanks to falling panel costs, but wind developers are getting squeezed by rising steel, concrete, labour and financing costs — plus community pushback and grid connection delays. Origin Energy’s CEO put it bluntly: building a wind farm now costs 50% more than it did back in 2020. On the policy side, the government’s decision to back off a proposed 30% capital gains tax on foreign renewable investors is being credited with helping unlock deals like this one — the Clean Energy Investor Group says it’s what gave this project “legs.” Energy Minister Chris Bowen is pointing to it as proof his Capacity Investment Scheme is doing its job.
So, KPMG Australia — still trying to climb out of this scandal, right? Well, their annual partner pay report just dropped, a month late, released quietly on a Monday evening — which, let’s be honest, is usually a sign someone doesn’t want eyes on it. And here’s the big one: for the first time ever, KPMG has stopped disclosing the chairman’s pay to its own partnership. That’s new chairman Michael Ebeid — we already know from a parliamentary hearing he’s on a million-dollar salary, roughly double what PwC pays its external chair — but beyond that figure, the firm’s gone dark on his remuneration. That breaks with KPMG’s long-standing principle of full pay transparency across the partnership. Now remember why KPMG’s in crisis mode in the first place — they misused confidential client information to chase new business, then pushed out the whistleblower who called it out. That whole mess cost them their CEO, chairman, COO and national audit boss, all gone within weeks. Which makes this report even more interesting, because two people you’d expect to be punished… weren’t. First, the HR head, Dorothy Hisgrove, who was tied up in the whistleblower scandal — she resigned in August but kept her senior Band 11 ranking, and she’s reportedly still getting paid, on top of an expected $2 million exit payout. Second — and this is the juicy one — Rachel Gatt, the partner who signed off on KPMG’s tender for the Macquarie Group audit. That’s the country’s biggest audit contract, worth more than $75 million. Macquarie just fired KPMG from that gig last week. And yet Gatt kept her Band 10 ranking, while other partners actually got demoted. There’s a conflict-of-interest angle here too — Gatt is close to Michelle Hinchliffe, a former KPMG partner who’s now a Macquarie director. And it turns out Hinchliffe met with KPMG executives three separate times while the firm was campaigning to replace PwC as Macquarie’s auditor — dinners with senior partners, one of which fell through, though she says she didn’t vote on the final decision. Meanwhile, a couple of women who did get demoted: Naomi Mitchell and Cassandra Hogan. And notably, for the first time in KPMG’s history, there’s no woman above Band 11 — only four partners even hold that rank now. The top three paid roles under the chairman — CEO, head of tax, head of consulting — are all men. Financially, it’s not pretty either — partner earnings are down about 20% year-on-year, KPMG already had high debt levels going into this, and with major audit contracts now cancelled or shaky, things look set to get worse before they get better.
And that’s it for this week.
And next week, I’ll be talking to performance expert Andrew Horsfield who draws on two decades working with leaders across business, education and elite sport to reveal how high performers navigate what he calls “the messy middle”, the space between where you are and where you want to be, when progress feels out of your control. At a time when many workers are being asked to do more with less, Horsfield offers practical tools to help people regain clarity, build resilience and keep moving forward, even when conditions aren’t ideal.
And I’ll be talking to independent economist Saui Eslake about the state of the Australian economy, inflation and the prospect of another RBA rate hike.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
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