“The pace of rental price growth dipped to just 0.6 per cent in 2017, the slowest pace of growth since 1993,” commented HIA Senior Economist Shane Garrett.
These figures are contained in the ABS Consumer Price Index release for the December 2017 quarter published today.
“For families reliant on the rental market, the deceleration in rents is welcome news.
“The slowdown in rental price pressures has been helped by the completion of large volumes of newlybuilt dwellings over the last couple of years. Investors, both domestic and foreign, have been instrumental in delivering this additional supply.
“The rate of rental inflation is well below the overall rate of inflation which rose to 1.9 per cent during the December 2017 quarter – just higher than in the previous quarter.
“It was also significantly lower than the increase in general housing costs, which grew by 3.4 per cent over the year. This is predominantly due to rising electricity costs which rose by 12.4 per cent over the past 12 months.
“Several countries’ central banks have started to lift their key interest rates. Taken with today’s inflation data for Australia and the fact that our labour market is tightening, we expect that the RBA’s next rate move will be upwards,” concluded Shane Garrett.
