Latest figures continue downward trend
According to the latest data from the Australian Bureau of Statistics, the Consumer Price Index (CPI) in Australia rose by 4.3% in the 12 months leading up to November. This figure represents a slight decrease from the 4.9% increase recorded in October.
Leanne Pilkington, President of the Real Estate Institute of Australia, noted that the November inflation figure continued the downward trend observed in recent quarters. Inflation stood at 5.4% in the September quarter, 6% in the June quarter, and reached a peak of 8.4% in December 2022.
“The 13 rate hikes by the RBA since May 2022 are slowly but surely slaying the inflation dragon,” Pilkington said.
Pilkington also said that the current trajectory aligns with the forecasts presented in the UN report titled "World Economic Situation and Prospects." The report predicts that Australia's inflation will ease to 3.3% in 2024, a projection consistent with the Treasury's forecast of 3.75% for the financial year.
The ABS data reveals that the annual movement for the monthly CPI, excluding volatile items such as fruit and vegetables, automotive fuel, and holiday travel and accommodation, rose by 4.8% in November. This marks a decrease from the 5.1% increase recorded in October. Additionally, the annual trimmed mean inflation, an analytical series, stood at 4.6% in November, down from the 5.3% increase in October.
Among the major contributors to the annual increase in the November CPI were housing (up 6.6%), food and non-alcoholic beverages (up 4.6%), and alcohol and tobacco (up 6.4%).
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While rents increased by 7.1% in the 12 months leading up to November 2023, the introduction of Commonwealth Rent Assistance, advocated for by the REIA, helped moderate the increase. Without this assistance, rents would have risen by 8.8% over the same period.
“The lagged response to the successive interest rate hikes are showing up in the CPI and the financial markets are anticipating that if this continues home buyers can anticipate a rate reduction,” Pilkington said.
However, home buyers may have to wait for that rate cut, with many market watchers pushing back their prediction for a rate cut from June to September.
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