The latest Consumer Price Index (CPI) figures are good news for the Australian economy and the Australian housing market, the head of a national real estate lobby has said.
The latest Australian Bureau of Statistics (ABS) figures show the CPI rose 0.4% in the December quarter 2015 and 1.7% through the year to the December quarter 2015.
According to the president of the Real Estate Institute of Australia (REIA), Neville Sanders, the figures confirm that inflationary pressures are well contained, which means consumers – in particular homebuyers – can expect a stable interest rate outlook.
“This means that we can expect a sustained period of low interest rates which is good news for home owners,” Sanders said.
“These figures are well below the RBA
’s target zone of 2-3% and should ease any pressure on the interest rate outlook.”
According to the CPI figures, the housing group recorded the weakest movement since the March quarter 1998 with an overall increase of 0.1%. This was made up of a 0.2% price rise for rents and a 0.1% price rise for new dwelling purchase by owner occupiers. The 0.1% rise for new dwellings purchase by owner occupiers is the weakest movement since March quarter 2014.
However, Sanders says this is a consequence of the recent housing boom rather than a warning sign.
“The impact of the past increased investor activity in the housing sector is flowing through to the lowest increases in rents in over two decades.”