The Australian Bureau of Statistics (ABS) yesterday released CPI rental data, which showed that rents across the combined capital cities rose 0.7% over the quarter:
ABS rental growth rising.
Over the 2021-22 financial year, rents rose a tepid 1.6% across the combined capital cities, according to the ABS:
Annual rental growth still weak.
Thus, rents grew at around one-quarter the headline inflation rate of 6.1% in the 2021-22 financial year, meaning rents have actually been disinflationary.
The situation is certain to change. Private data providers are recording annual rental growth closer to 10%. For example, CoreLogic reported that Australian capital city rents grew by 9.1% in the year to June 2022 – the highest rate of growth since December 2007:
Strong rental growth on low vacancy rates.
The ABS measures rents paid across the market, whereas CoreLogic and the other private data providers measure newly signed rents.
Eventually, the ABS will update its rental series to match the actual market. And when it does, rents will rise sharply and add to Australia’s inflationary pressures, in turn forcing the RBA to respond with higher interest rates.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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Surely the RBA would ignore the rental component of CPI. It’s not like having a roof over your head is a discretionary expenditure that needs to be dampened.
Exactly. The only expenses that really need to be tracked in the CPI are Uber eats delivery fees, jet skis, European travel airfares and Domain subscriptions. Other items such as food and shelter are irrelevant.
Same goes for petrol, energy, food, etc.
cost of housing… checks notes. Oh, no, sorry, that isn’t included
Apparently even in the US where housing is included they use a suspect method of surveying homeowners of how much they would be willing to pay in rent
Retitle it “Rental Crisis to drive house prices higher and save the specufestors”
A rental crisis is great news for specufestors on higher interest rates.
Rates up 1%, Rents up 30% !
Now next gotta ramp up immigration quickly to get another 20% higher rents…
and save the (housing) economy !
Add 200K migrants to
– A rental crisis
– Overrun hospitals crisis
– Energy crisis
Welcome to Australia, the economic zone where citizens work to ensure the economy stays afloat for the few.
The few – are bank/fund executives.
Q? Why do financiers, and Public service RBAs, earn double the salary of other mid level execs….700k for APRA head to write 1 letter a year? Or a fund manager to buy CommBank shares with your super and charge 2% for the idea.
A) So someone can buy those 5 million houses in East Sydney.