
The Consumer Price Index (CPI) rose 2.7 per cent in the year to August, down from 3.5 per cent in July and 3.8 per cent in June, according to the latest Australian Bureau of Statistics data.
Real Estate Institute of Australia President Leanne Pilkington said all three broad measures of inflation are now at their lowest levels since 2021.
“The annual movement for the monthly CPI excluding the volatile items of fruit and vegetables, automotive fuel and holiday travel and accommodation, rose 3.0 per cent in August, down from the July figure of 3.7 per cent and 4.0 per cent for June,” Ms Pilkington said.
The trimmed mean, an important analytical series, also confirmed the downward trend, rising 3.4 per cent in August compared to 3.8 per cent in July and 4.1 per cent in June.
Housing, food and non-alcoholic beverages, and alcohol and tobacco saw the most significant price rises at the group level.
Ms Pilkington noted that rental increases are also showing signs of moderation, with rents rising 6.8 per cent in the 12 months to August, down from 6.9 per cent in July and 7.1 per cent in June.
“REIA’s Real Estate Market Facts released earlier this month shows that vacancy rates increased in all capital cities except Melbourne and Hobart, where they remained stable. This suggests that the slowdown in rental increases should continue,” she said.
The REIA president expressed optimism about reaching the Reserve Bank of Australia’s target zone but warned against potential changes to negative gearing.
“Current speculation regarding abolition of negative gearing would put a halt to this just as we are seeing a pick up in the proportion of housing loans going to investors, back to the levels a decade ago,” Ms Pilkington said.
She cited studies suggesting such action could lead to additional rent increases of between 7 and 12 per cent.