The Australian Bureau of Statistics’ (ABS) rental series was released yesterday, as part of the September quarter consumer price index (CPI).
According to the ABS, rents rose by 1.3% over the quarter to be up 2.8% year-on-year. In turn, annual rental growth was less than half the headline rate of inflation, which was 7.3% in the year to September:
ABS rents rising but still too low.
By contrast, all private sector data on advertised rents is showing double-digit growth.
For example, CoreLogic reported 10.0% rental growth nationally in the year to September off record low vacancies:
CoreLogic rents soaring at double-digit rates.
SQM Research, Domain and PropTrack each recorded even stronger rental growth.
The ABS measures rents paid across the market, whereas CoreLogic and the other private data providers measure newly signed rents.
Accordingly, the surge in advertised rents will soon have ramifications for CPI as the ABS’ rental series catches up with the actual market.
Rents will, therefore, fan Australia’s inflationary flames over coming quarters, which will pressure the Reserve Bank to lift interest rates even higher.
