Housing prices help drive rise
According to the latest data released by the Australian Bureau of Statistics (ABS), the Consumer Price Index (CPI) experienced a 1% increase in the March 2024 quarter and a 3.6% rise annually.
Michelle Marquardt (pictured above), ABS head of prices statistics, noted that the CPI saw a 1% uptick in the March quarter, surpassing the 0.6 percent rise observed in the December 2023 quarter.
“Annually, the CPI rose 3.6% to the March 2024 quarter. While prices continued to rise for most goods and services, annual CPI inflation was down from 4.1 per cent last quarter and has fallen from the peak of 7.8 per cent in December 2022," Marquardt said in a news release.
The notable contributors to the rise in the March quarter were education (up 5.9%), health (up 2.8 percent), housing (up 0.7 percent), and food and non-alcoholic beverages (up 0.9%).
Education fees surged at the start of the calendar year, marking the strongest quarterly rise since 2012. Tertiary education recorded a 6.5% increase due to annual CPI indexation being applied to tertiary education fees. Secondary education saw a 6.1% rise, while Preschool and primary education experienced a 4.3% increase as fees were raised at the beginning of the school year.
Medical and hospital services prices increased by 2.3% in the March quarter, attributed to GPs and other health service providers revising their consultation fees. Additionally, the reset of Medicare and Pharmaceutical Benefit Scheme Safety Net thresholds at the start of the calendar year resulted in fewer people qualifying for subsidised prices for out-of-hospital services and pharmaceuticals.
The rise in housing prices was primarily driven by rents (up 2.1%) and new dwellings purchased by owner-occupiers (up 1.1%).
"Rental prices rose 2.1% for the quarter in line with low vacancy rates across the capital cities. Rents continue to increase at their fastest rate in 15 years," Marquardt said.
Higher labour and material costs contributed to price increases for the construction of new dwellings, with a 1.1% increase observed, slightly lower than the 1.5% rise in the December 2023 quarter.
In the food and non-alcoholic beverages category, prices rose driven by non-alcoholic beverages (up 3.4%), fruit and vegetables (up 2.5%), and food products not elsewhere classified (up 1.9%). However, a price fall was observed for meat and seafood (down 0.7%) due to increased supply and discounting.
Annually, the CPI rose by 3.6%, with housing (up 4.9%), food and non-alcoholic beverages (up 3.8%), and alcohol and tobacco (up 6.3%) contributing the most.
Underlying inflation measures, such as annual trimmed mean inflation, stood at 4.0 percent, down from 4.2 percent in the December quarter.
“This is the fifth quarter in a row of lower annual trimmed mean inflation, down from the peak of 6.8 per cent in the December 2022 quarter,” Marquardt said.
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