Analysis of new data shows a rise in the CPI figure for the December 2018 quarter, which one industry body says is good news for those looking to add to their portfolio.
The All Groups CPI saw an increase of 0.5 of a percentage point in the December quarter for 2018, rising by 1.8 per cent for the year, which the president of the Real Estate Institute of Australia Adrian Kelly said was positive for property buyers.
He said the annual changes for the analytical series of trimmed mean was 1.8 per cent, which he suggested meant the currently low interest rate could be sticking around for longer.
“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 Housing Group saw an increase of 0.2 of a percentage point for the quarter, which meant a 1.5 per cent increase overall to December 2018. Rents also saw a 0.2 of a percentage point increase for the quarter, translating to an annual increase by 0.5 of a percentage point.
Mr Kelly said the CPI figures reveal that an increase in housing investment has meant rent growth has been kept at the lowest rate since 1995, with any external taxation changes would be likely to increase this.
“As we enter an election year, [this] is 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,” he said.
“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.”