- The annual rate of inflation was 6% in June, down 1ppt from the rise recorded in March this year.
- Prices continued to rise for most goods and services, but were offset by fuel and domestic travel.
- Rents recorded the strongest quarterly rise since 1988.
The annual rate of inflation dropped to 6.0% in June 2023, which is lower than the 7.0% recorded in the March 2023 quarter, according to the latest Consumer Price Index (CPI) data released by the Australian Bureau of Statistics (ABS), today; the quarterly rise in CPI was 0.8%.
ABS head of statistics, Michelle Marquardt, says the quarterly rise is the lowest recorded since September 2021.
“While prices continued to rise for most goods and services, there were some offsetting price falls this quarter including for domestic holiday travel and accommodation and automotive fuel,” she said.
Calls to halt rising rates
Australian Council of Social Services (ACOSS) has urged the Reserve Bank of Australia (RBA) not to raise rates further, in light of slowing inflation.
ACOSS acting CEO, Edwina MacDonald, says there are concerns about increasing unemployment if rates continue to rise.
“The RBA’s forecast rise in unemployment to 4.5% by July 2025 would equate to 150,000 people losing work,” she said.
“Throwing people out of work is a terrible way to tackle inflation.”
Increasing rental prices
Among the most significant contributors to the rise in the June quarter rise were rents, at 2.5%.
“Rents recorded the strongest quarterly rise since 1988, reflecting low vacancy rates amid a tight rental market; rental price growth for flats continued to outpace the growth for houses,” Marquardt said.
New dwelling and rents in Australia, annual movement
MacDonald added that increasing rents is one of the biggest drivers of inflation.
“Governments should intervene directly to bring rental inflation under control through the regulation of rents,” she said.
Master Builders Australia (MBA) CEO, Denita Wawn, says rents are continuing to accelerate because landlords’ mortgage interest costs have risen so substantially over the past 14 months, and there are not enough new higher-density homes to meet rental demand.
“The annual volume of new apartment and unit starts dropped below 100,000 back in 2019 and has come nowhere near this threshold ever since,” she said.
“Supply of higher-density homes needs to be resuscitated urgently.
“Doing so will require action to reduce the costs of creating new homes, bolstering investor demand, and making the risks to builders and developers a little less confronting.”
Building costs down
Wawn added that it was encouraging to see the cost of newly built homes continued to slow.
“Over the year to June 2023 quarter, new home prices rose by 7.8%. This has been helped by the slowdown in the cost of key home building materials like timber and some metals.”
