Sold and
Leased Properties
> Find out where
CPI rise doesn’t mean rates should rise
Posted on 2010-01-29
The consumer price index (CPI) increased by 0.8 per cent for housing in the December 2009 quarter, compared to an increase in overall inflation of 0.5 per cent.
Meanwhile, over the past year the CPI for housing increased by 5.5 per cent, compared to 2.1 per cent overall.
Real Estate Institute of Australia president David Airey says the December figures shouldn't be interpreted as rampant demand in the housing sector.
He says the facts underlying the outcome need to be examined before jumping to conclusions.
First of all, he says the December figure reflects three consecutive rate rises over the quarter, and contributing to an annual increase of 5.5 per cent was a substantial increase in the price of utilities.
He says electricity prices rose by 15.5 per cent, sewerage increased by 14.1 per cent and property rates and charges rose by 5.7 per cent.
"When you examine the details, you could not conclude that further interest rates rises are required next week to suppress excessive demand in the housing sector," he says. Indeed, you could draw a contrary conclusion.
"I encourage the Reserve Bank of Australia to exercise caution next week in its decision on official interest rates."
Source: Australian Property Investor
DISCLAIMER: Every care has been taken to verify the accuracy of the information contained herein, but no warranty is given or implied and prospective purchasers/ tenants are advised to carry out their own investigations. Details herein do not constitute any representation by the vendor. Lessor or the agent and are expressly excluded from any contract.