Rental growth slowing
There's a bright spot for renters in the new inflation figures.
There's a bright spot for renters in the new inflation figures.The Australian Bureau of Statistics (ABS) has released its Consumer Price Index, revealing a deceleration of rental growth. Rents grew just 0.6% in 2017, which HIA senior economist Shane Garrett said was the slowest pace of growth since 1993.
"For families reliant on the rental market, the deceleration of rents is welcome news," Garrett said.
Rental inflation lagged overall inflation, which also came in low at 1.9% for the December quarter.
"It was also significantly lower than the increase in general housing costs, which grew by 3.4% over the year. This is predominantly due to rising electricity costs, which rose by 12.4% over the past 12 months," Garrett said.
In light of this, Garrett forecast that the next move by the Reserve Bank of Australia would be upward.
Garrett said rental growth was stymied by an uplift in housing supply.
"The slowdown in rental price pressures has been helped by the completion of large volumes of newly-built dwellings over the last couple of years. Investors, both domestic and foreign, have been instrumental in delivering this additional supply," Garrett said.
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