Inflation figures hold good news for home buyers, renters
A 17-year low for inflation strengthens the chance for an RBA rate cut, and has been touted as good news for home buyers and renters.
Official Australian Bureau of Statistics (ABS) inflation figures for the June quarter show the consumer price index (CPI) increased by just 0.4% in the June quarter, bringing the annual increase to 1%. The result is the lowest annual inflation figure since June 1999.
The figures is well below the Reserve Bank’s 2-3% target band, strengthening the case for a cut to the official cash rate when the RBA meets next week, Real Estate Institute of Australia (REIA) president Neville Sanders said.
“With the CPI figures always a central component of the RBA’s decision, the latest inflation data looks like being the trigger for a rate cut next week. A cut following the one in May will improve affordability for existing and prospective home buyers,” he said.
The inflation figures also revealed good news for renters, Sanders said.
“The Housing Group increased by 0.4% for the quarter and 1.3% for the year to June 2016 with rents increasing by just 0.2% for the June quarter and 0.7% for the year. 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 June has been the lowest since December 1994,” Sanders said.