The December 2018 quarter CPI figure is good news for both renters and home buyers, the REIA has said.
REIA president Adrian Kelly said that the latest figures continue to push the overall trend upwards.
“Rents increased by 0.2 [of a percentage point] for the quarter and increased by just 0.5 [of a percentage point] for the year. The average annual change has been less than 1.0 per cent since March 2016.
“The CPI figures show that the increased investment in housing has kept growth in rents at the lowest rate since 1995 and, as we enter an election year, is a clear testament that the current taxation arrangements benefit renters and that any change in the treatment of negative gearing and capital gains tax would see an increase in rents.”
Mr Kelly predicted that the cash rate would remain unchanged at the next sitting.
“With the RBA meeting next week, home buyers can be comfortable in the knowledge that the latest inflation data together with a cooling in the housing market would suggest that the RBA will hold official interest rates stable for some time yet.”
He was bullish about the CPI performance.
“The All Groups CPI increased by 0.5 [of a percentage point] in the December quarter, giving an annual increase of 1.8 per cent.
“The annual changes for the analytical series of trimmed mean and for the weighted median were 1.8 per cent and 1.7 per cent, respectively.
“The annual changes in the trimmed mean has been below 2 per cent since March 2016 and suggests the continuation of historically low official interest rates for some time yet.”
Mr Kelly said the same pattern was evident across the board.
“The Housing Group increased by 0.2 [of a percentage point] for the quarter and 1.5 per cent for the year to December 2018.
“The major increases in the Housing Group for the year were and gas and other household fuels, up [by] 3.2 per cent, and maintenance and repairs, up [by] 2.4 per cent.”