Low CPI is good news for home buyers and renters

The September 2016 quarter CPI is good news for home buyers and renters, according to the Real Estate Institute of Australia.

According to the Real Estate Institute of Australia (REIA), the September 2016 quarter CPI figure continues to be good news for home buyers and renters.

“The All Groups CPI, increased by 0.7% in the June quarter giving an annual increase of 1.3%. This is marginally higher than the annual increase to the June quarter of 1.0% which was the lowest annual changes since June 1999”, the President of the REIA Mr Sanders said.

“The annual changes for the analytical series of trimmed mean and for the weighted median were 1.7% and 1.3% respectively - the same as for the previous quarter and the lowest annual increase since the two series were introduced in June 2003. This is well below the RBA’s target zone of 2-3% and suggests the continuation of historically low interest rates.”

“The Housing Group increased by 1.0% for the quarter and 1.8% for the year to September 2016 with rents increasing by just 0.3% for the September quarter and 0.7% for the year. The major contributors to the increase in the Housing Group were electricity costs and property rates and charges.”

“From 2013, when investment in housing started to pick up, we have seen the rate of increase in rents slow down in Australia. The annual increase in rents to September has been the lowest since December 1994.”

“The latest CPI figures provide further evidence that the current taxation arrangements which provide many Australians with the opportunity to invest in property adds to the housing supply and keep rents lower than they would otherwise be.”

“With 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 sustained period. The cuts in interest rates in May and August have contributed to an improved outlook for existing and prospective home buyers”, concluded Mr Sanders.

Source: The Real Estate Conversation