Finance advice

Inflation outpaces property values

By webmaster

While capital city house values have greatly outpaced the rate of inflation for the last 15 years, it seems the tide is beginning to turn.

The latest data from the Australian Bureau of Statistics found inflation grew 0.9 per cent in June 2011, while property values across the combined capital cities fell by 1.5 per cent.

RP Data’s research analyst Cameron Kusher said these results would be well received by potential property buyers.

“As property values ease and the cost of goods and services continue to increase, property becomes relatively more affordable,” he said.

“While it is unlikely that that a couple of quarters of falling values will result in a substantial improvement in affordability, if property values continue to grow at a rate below the growth in inflation, affordability will continue to improve.”

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