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April’s latest consumer price index data held steady, reinforcing expectations of more rate cuts in 2025 as inflation stabilises and rent growth eases.
The latest Australian Bureau of Statistics (ABS) figures showed that the monthly consumer price index (CPI) indicator rose 2.4 per cent in the 12 months to April 2025.
ABS head of prices statistics, Michelle Marquardt, said that the annual CPI figures have remained steady at 2.4 per cent over the last three months.
The annual change in monthly CPI, excluding volatile items like fruit, vegetables, fuel and holiday travel, rose 2.8 per cent in April, up from 2.6 per cent in March and 2.7 per cent in February.
“Annual trimmed mean inflation was 2.8 per cent in April 2025. This was up slightly from the 2.7 per cent inflation in March and has remained relatively stable for the past five months,’ Marquardt said.
According to the data, the biggest drivers of the annual CPI increase were recreation and culture (+3.6 per cent), food and non-alcoholic beverages (+3.1 per cent), and housing (+2.2 per cent).
The annual housing inflation rose by 2.2 per cent in April, up from 1.8 per cent recorded in March.
While new dwelling prices increased by 1.2 per cent over the year to April, slightly higher than the 1 per cent rise to March, they were still the second-lowest in annual growth since April 2021.
The ABS said annual growth in new dwelling prices remained low due to home builders offering discounts and promotions to attract buyers.
Data showed that rents increased by 5 per cent over the 12 months to April, down from 5.2 per cent recorded in March, marking the lowest annual growth since February 2023 amid rising vacancy rates in most capital cities.
Real Estate Institute of Australia president, Leanne Pilkington, said that the figures align with the Reserve Bank’s expectations for future rate relief.
“Allowing for the volatility of monthly CPI figures, they are consistent with the Reserve Bank of Australia’s expectations of 2–3 per cent throughout 2025,” Pilkington said.
“The figures support market expectations of further rate cuts during 2025, following the February and May cuts, which would provide additional relief for borrowers.”
“With each rate cut of 25 percentage points, the proportion of family income required to service their loan drops by 1 percentage point. By year’s end mortgage payments on an average home loan of $650k may have reduced by $500 per month,” Pilkington concluded.
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