ABS figures released today show that the All Groups CPI, increased by 1.3 per cent in the December quarter, 2021 and by 3.5 per cent for the year.
Real Estate Institute of Australia (REIA), President, Hayden Groves said the CPI was a mixed bag for housing with a 4.2 per cent increase in the price of new dwelling purchase by owner-occupiers a major contributor.
“High levels of building construction activity combined with shortages of materials and labour have contributed to two consecutive quarters of the largest rise in new dwelling prices since September 2000 following the introduction of the GST.
“The quarterly changes for the analytical series of trimmed mean and for the weighted median, which exclude large one-off price impacts, were 1.0 per cent and 0.9 per cent for the December quarter respectively and 2.6 per cent and 2.7 per cent for the year. The annual changes for both are the highest since June 2014.
Mr Groves said that the Housing Group increased by 1.8 per cent for the December quarter and 4.0 per cent for the year consistent reflecting current market conditions.
“The capital city weighted increase in rents was 0.1 per cent for the quarter and 0.4 per cent for the year.”
“Rents fell again in Sydney and Melbourne, the fourth consecutive quarterly fall for Sydney, and the third consecutive quarterly fall for Melbourne.”
“Rents across the other capital cities, in line with population trends, continued to rise.”
Mr Groves said the CPI figures hinted at relatively stable monetary settings for the remainder of 2022.
“Whilst the increase in the analytical series are the highest for over six years they remain within the RBA’s long term target rate of 2 to 3 per cent.
“This suggests that there will be no immediate pressures on interest rates, which according to the RBA won’t be until 2024.
“Buyers of new dwellings can expect further pressures on costs as the sector works through its current backlog and supply-side disruptions. However, these factors are more likely to be transitory rather than embedded in the economy.
“This suggests some buyers and owners will continue to see relatively benign monetary policy settings for some time yet,” concluded Mr Groves.
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