- The Consumer Price Index indicator rose 7.3% to November 2022, reports ABS.
- Housing was the main contributor to the annual increase.
- High labour and material costs contributed to a 17.9% annual rise in new dwelling prices.
Rising housing costs are continuing to heap pressure on Australian households, with new data showing that housing is currently the main contributor to record-high inflation.
According to the latest data from the Australian Bureau of Statistics (ABS), housing made up the largest portion of a 7.3 per cent rise in the monthly Consumer Price Index (CPI) for November, with an annual increase of 9.6 per cent.
ABS Head of Prices Statistics, Michelle Marquardt said there were a range of housing costs that led to the near double-digit rise.
“This month’s annual movement of 7.3 per cent compares to 6.9 per cent in October and 7.3 per cent in September, indicating ongoing inflationary pressures,” Ms Marquardt said.
“The Housing group was the main contributor to the annual increase in the November monthly CPI indicator.
“High labour and material costs contributed to the annual rise in new dwelling prices (+17.9 per cent) although, the rate of price growth for new dwellings has eased compared to the 20.4 per cent annual rise seen in October.”
According to the ABS, the most significant contributors to the annual rise in November outside of housing were food and non-alcoholic beverages (+9.4 per cent), transport (+9.0 per cent), furniture, household equipment and services (+8.4 per cent) and recreation and culture (+5.8 per cent).
Despite housing costs rising, property values have begun to fall in most major capital cities across the country, with CoreLogic noting that Australian home values have officially recorded their largest-ever decline on record.
Previously the largest fall in house prices, of 8.38%, occurred between October 2017 and June 2019, while the recent fall of 8.40% happened in just nine months.
Sydney, Melbourne and Brisbane all recorded large declines while prices have fallen by less than 1% in Perth.
According to QBE, the housing market slowdown that Australia is experiencing now will be widespread but vary among states and territories.
Sydney will be the most susceptible to rising borrowing costs and could experience the largest decline.
While the steepest falls in dwelling prices could happen over the next six months.
In late 2023, Australia’s housing market is set to mark the bottom of the property cycle according to QBE, with prices set to recover after bottoming out, as borrowing costs stabilise.
