The release of new figures has prompted the real estate industry's peak body to call for the official cash rate to be cut on 3 February.
The Real Estate Institute of Australia (REIA) said the recent Consumer Price Index (CPI) figures, released today, show that the Reserve Bank of Australia’s (RBA) “underlying trend series measures of inflation continue to be well within its target zone”.
REIA president Neville Sanders said this should translate into good news for home owners.
“In the December quarter, the CPI rose by 0.2 per cent and an annual rate of 1.7 per cent. These figures are below the RBA’s target zone of 2-3 per cent, and should not put pressure on the inflation outlook,” Mr Sanders said.
The housing group within the index increased by 0.5 per cent for the December quarter, which was the same as the September quarter – bringing the annual rate of increase to 2.4 per cent.
The main increase in the December quarter for the housing group was for new dwelling purchases, which increased by 1.1 per cent. Rents increased by 0.5 per cent for the quarter and 2.4 per cent for the year.
Mr Sanders said the figures give the RBA room to move when they meet to decide the cash rate on 3 February.
“With inflation under control, combined with a slowdown in housing finance, it’s appropriate that the RBA Board seriously considers a cut in interest rates at their meeting next week,” he said.