The Consumer Price Index (CPI) rose 0.5% in the December quarter, surpassing the initial forecasts of economists. Year-over-year, it climbed by 1.8%, according to the Australia Bureau of Statistics (ABS).
“The annual changes for the analytical series of trimmed mean and for the weighted median were 1.8% and 1.7%, respectively. The annual changes in the trimmed mean have been below 2% since March 2016 and suggest the continuation of historically low official interest rates for some time yet,” Real Estate Institute of Australia (REIA) President Adrian Kelly said.
ABS’ report showed that the housing group jumped by 0.2% for the quarter and 1.5% for the year to December. The major increases under the category for the year were and gas and other household fuels (+3.2%) and maintenance and repairs (+ 2.4%).
Rents, meanwhile, increased by 0.2 % and 0.5% over the quarter and over the year, respectively. The average annual change has been less than 1% since March 2016.
The figures reflected the increased investment in housing, which has kept growth in rents at the lowest rate since 1995.
“As we enter an election year, (this) is clear testament that the current taxation arrangements benefit renters and that any change in the treatment of negative gearing and capital gains tax would see an increase in rents,” Kelly said.
These inflation data, along with a weakening housing market, imply that the Reserve Bank of Australia may keep its official interest rates stable for some time, Kelly said.
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