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While the quarterly figures held steady, the ABS has revealed annual inflation to record its first increase since the December quarter of 2022.
The Consumer Price Index (CPI) data for the June quarter 2024 released by the Australian Bureau of Statistics (ABS) has revealed an annual increase of 3.8 per cent and a quarterly increase of 1 per cent.
ABS head of prices statistics Michelle Marquardt said: “The June quarter rise is the same as the 1.0 per cent rise in the March 2024 quarter.
“The annual rise of 3.8 per cent for the June quarter is up from 3.6 per cent in the March quarter. This is the first increase in annual CPI inflation since the December 2022 quarter.”
Housing was one of the top contributors to the CPI in both annual and quarterly terms, rising by 5.2 per cent and 1.1 per cent, respectively.
“The continuing tight rental market and low vacancy rates caused rental prices to go up 2.0 per cent for the quarter, following a 2.1 per cent rise in the March 2024 quarter,” Marquardt said.
Construction of new dwellings rose by 1.1 per cent during the June quarter, following a 1.1 per cent rise in the previous corresponding period. According to the ABS, this was largely driven by higher labour and material costs.
According to the ABS, rents and new dwelling purchases by owner-occupiers drove the annual and quarterly growth in inflation by 7.3 per cent and 5.1 per cent (annual) and 2 per cent and 1.1 per cent (quarterly).
While annual inflation rose for the first time since the December quarter 2022 and quarterly inflation held steady from March to June, the monthly CPI indicator revealed a rise of 3.8 per cent in the 12 months to June, a drop from the 4 per cent recorded a month prior.
Furthermore, annual trimmed mean inflation was 4.1 per cent in the 12 months to June, down from 4.4 per cent in May.
Speaking to The Adviser, managing director of the Finance Brokers Association of Australia (FBAA), Peter White, said that there are other indicators “extraordinarily important” other than the CPI in regard to what the Reserve Bank of Australia (RBA) will decide with August’s cash rate decision.
“…rates won’t go up, and I don’t see them going up even into next year,” White said.
“The question is, when do they come down? To me, it’ll probably be the back end of the first quarter (around March), and then, so long as the trend is right, I would see there could be a downward adjustment”.
[RELATED: Dwelling approvals hit lowest number since FY11–12]
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