CPI

The Australian Bureau of Statistics (ABS) has today released its December 2017 Consumer Price Index (CPI) figure.

Where were the biggest movements?

The most significant price rises this quarter were:

  • Automotive fuel (up 10.4%)
  • Tobacco (up 8.5%)
  • Domestic holiday travel and accommodation (up 6.3%)
  • Fruit (up 9.3%)

The most significant offsetting price falls in the quarter were:

  • International holiday travel and accommodation (down 1.7%)
  • Audio visual and computing equipment (down 3.5%)
  • Telecommunication equipment and services (down 1.4%)

The All Groups CPI

  • The All Groups CPI rose 0.6% this quarter (compared with a rise of 0.6% in the September quarter 2017); and
  • Also rose 1.9% over the 12 months to the December quarter 2017. This compares with a rise of 1.8% over the 12 months to the September quarter 2017.

Real Estate Institute of Australia President, Malcolm Gunning said the latest CPI figure continues to be good news for renters and home buyers.

“Rents increased by just 0.3 per cent for the December quarter and 0.7 per cent for the year,” Malcolm said. “From 2013, when investment in housing started to pick up, we have seen the rate of increase in rents slow down in Australia. For the last eight quarters the average annual change has been 2.3 per cent.”

“The Housing Group increased by 0.3 per cent for the quarter and 3.4 per cent for the year to December 2017. The major increases in the Housing Group for the year were electricity (up 12.4 per cent), gas and other household fuels (up 7.2 per cent) and rates and charges (up 2.6 per cent).”

“The latest CPI figures show that the increased investment in housing has kept growth in rents lower than they have been historically and is clear testament that the current taxation arrangements benefit renters and that any change would see an increase in rents.

“In Sydney and Melbourne where much of the investor activity has been focussed the increase in rents in the past 12 months has been 2.4 per cent and 1.8 per cent respectively.

“With the RBA meeting next week for the first time in 2018 and the CPI figures always a central component of the RBA’s consideration, the latest inflation data would suggest that home buyers can be comfortable in the knowledge that interest rates will remain stable for a while yet,” Mr Gunning said.

Note: The next CPI update will be March 2018, released 24 April 2018.

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