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The real estate industry body has shared its expectation for a rate cut following the release of the latest consumer price data.
While the latest quarterly figures suggest an easing in inflation, the Real Estate Institute of Australia (REIA) has pointed to climbing rents and the declining economy in urging the Reserve Bank of Australia (RBA) to take action.
Recent data from the Australian Bureau of Statistics (ABS) has revealed that the CPI rose 2.1 per cent in the year up to October 2024, holding steady with the change recorded in the 12 months to September, but down from the 2.7 per cent rise observed in the year to August.
Weighing in on these findings, REIA president Leanne Pilkington noted that the “annual movement for the monthly CPI excluding the volatile items of fruit and vegetables, automotive fuel and holiday travel and accommodation, rose 2.4 per cent in August, down from the September figure of 2.7 per cent and 3 per cent for August”.
“This is the lowest since November 2021 before the RBA started increasing its interest rate increases in May 2022,” Pilkington said.
While Pilkington acknowledged that the annual trimmed mean increased 3.5 per cent in October, compared to 3.2 per cent in September and 3.5 per cent in August, she stressed that the “monthly CPI indicator is not as comprehensive as the ABS’s quarterly inflation data as it only updates prices for between 62 per cent and 73 per cent of the consumer price index basket”.
The president noted that rents rose by 6.7 per cent in the 12 months to November, lifting from the 6.6 per cent increase in September but down from 6.8 per cent in August.
Pilkington also stated that “per capita GDP figures highlight a slowing economy with six consecutive quarters of decline and a fall of 1.5 per cent in the year to June”.
“Against this background of a slowing economy and with a consistent downward trend across the three measures of CPI, the RBA will need to act soon on interest rates given the inherent lags in the system,” Pilkington said.
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