Inflation expectations collapse

From Roy Morgan Research:

Surveyed in September, Australians as a whole said they expected inflation to increase by 4% annually over the next two years. This is up very slightly (0.1%) on how they were feeling the previous month, but it is down a little (0.3%) on their expectations a year earlier.

However there was a notable difference in the expectations of home owners compared to renters, with the latter taking a much more pessimistic outlook.

Renters expect inflation to rise 4.7% over the next two years, while home owners expect inflation of 3.8% and those paying off mortgages are expecting only a 3.4% rise…

The difference in views between home owners and renters makes sense.

Home owners are the prime beneficiaries from the RBA’s 0.75% cuts to official interest rates.

By contrast, renters are facing a tightening housing market as dwelling construction slows below population growth:

Leith van Onselen

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