
The Consumer Price Index fell to 2.4 per cent annually in December 2024, reaching its lowest point since March 2021 and moving well within the Reserve Bank’s target range.
The quarterly increase was just 0.2 per cent, marking a significant decline from previous quarters, according to Australian Bureau of Statistics data.
This result sits below market expectations and the RBA’s forecast of 2.6 per cent for headline inflation.
Real Estate Institute of Australia President Leanne Pilkington said: “With all three broad measures of inflation at the lowest they have been since early 2022 and below the RBA’s forecasts, borrowers can reasonably expect that a cut in interest rates by the RBA is imminent.”
The trimmed mean, a key measure excluding extreme price movements, fell to 3.2 per cent annually, continuing its downward trend from a peak of 6.8 per cent in December 2022.
Price falls in electricity and automotive fuel contributed to the lower inflation figure, while recreation and culture rose 1.5 per cent and alcohol and tobacco increased 2.4 per cent.
Rental prices showed signs of easing, with a quarterly rise of 0.6 per cent – the lowest since March 2022 – and an annual increase of 6.4 per cent, down from 6.7 per cent in September.
Ms Pilkington said: “For each drop in interest rates by 0.25 per cent monthly repayments would decrease by around $100 and the proportion of family income required to service their loan would drop by 1 percentage point from the current historically high level of 48.6 per cent.”
The data strengthens expectations for an interest rate cut at the RBA’s February meeting, which could provide relief for borrowers and improve accessibility for first home buyers.