Inflation figures hold good news for renters
While the latest inflation figures may have the RBA concerned, there’s good news for renters.
Consumer price index (CPI) figures released yesterday by the Australian Bureau of Statistics (ABS) showed the first period of deflation in seven years. While the news suggests a sluggish economy, there was good new for renters in the figures, according to REIA president Neville Sanders. Sanders said the annual increase in rents was the lowest in more than two decades.
“From 2013, when investment in housing started to pick up, we have seen the rate of increase in rents slow down in Australia. The March quarter 2016 increase was 0.1%, the lowest since March 1995. The annual increase in rents to March 2016 has been 0.9%, again the lowest since March 1995,” Sanders said.
Sanders said Sydney and Melbourne saw the lowest annual increase in rents since June 2006, despite strong investor activity in the cities. He claimed the figures suggested negative gearing was helping to keep rents low.
“In the current debate on negative gearing the latest CPI figures provide 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,” Sanders said.
“With housing affordability and taxation arrangements for housing being key issues in the upcoming Federal election the REIA hopes the debate will be based on rationale evidence such as provided by the CPI figures.”