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The December 2017 Consumer Price Index (CPI) figure released today by the Australian Bureau of Statistics (ABS) continues to be good news for home buyers and renters, according to the Real Estate Institute of Australia (REIA).

“The All Groups CPI, increased by 0.6 per cent in the December quarter giving an annual increase of 1.9 per cent. The quarterly increase is the same as in the preceding quarter and the annual increase is marginally higher than to the September quarter of 1.8 per cent”, REIA President Malcolm Gunning said.

“The annual change for the analytical series of trimmed mean and for the weighted median was 1.8 per cent and 2.0 per cent, respectively, with the annual change in the trimmed mean being the same for the past four quarters. This is below the RBA’s target zone of 2-3 per cent and suggests the continuation of historically low interest rates for some time yet.

“The Housing Group increased by 0.3 per cent for the quarter and 3.4 per cent for the year to December 2017. The major increases in the Housing Group for the year were electricity (up 12.4 per cent), gas and other household fuels (up 7.2 per cent) and rates and charges (up 2.6 per cent).

“Rents increased by just 0.3 per cent for the December quarter and 0.7 per cent for the year. From 2013, when investment in housing started to pick up, we have seen the rate of increase in rents slow down in Australia. For the last eight quarters the average annual change has been 2.3 per cent.

“The latest CPI figures show that the increased investment in housing has kept growth in rents lower than they have been historically and is clear testament that the current taxation arrangements benefit renters and that any change would see an increase in rents.

“In Sydney and Melbourne where much of the investor activity has been focussed the increase in rents in the past 12 months has been 2.4 per cent and 1.8 per cent respectively.

“With the RBA meeting next week for the first time in 2018 and the CPI figures always a central component of the RBA’s consideration, the latest inflation data would suggest that home buyers can be comfortable in the knowledge that interest rates will remain stable for a while yet,” Mr Gunning said.