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February’s consumer price index data has shown a slowdown in growth across housing categories and a modest overall monthly inflation cutback.
According to the latest data from the Australian Bureau of Statistics (ABS), the consumer price index (CPI) has increased by 2.4 per cent in the 12 months leading up to February 2025.
ABS head of prices statistics, Michelle Marquardt, said the annual CPI inflation recorded in February slightly decreased after a fixed 2.5 per cent over the previous months.
Marquardt also noted that in February, the annual trimmed mean inflation was at 2.7 per cent.
“This was down slightly from the 2.8 per cent inflation in January and has remained relatively stable for three months,” she said.
The decline signals a continued drop in inflation, which the president of Real Estate Institute of Australia (REIA), Leanne Pilkington, said aligns with the Reserve Bank of Australia (RBA) targets and federal budget forecasts.
“Even allowing for the volatility of monthly CPI figures, they are consistently trending down towards the RBA’s target range and are reflecting the budget forecast of 2.5 per cent inflation for 2024–25,” Pilkington said.
Commonwealth Bank senior economist, Stephen Wu, said the CPI results were a positive outlook for housing affordability.
“There was once again better news on housing inflation, with new dwelling costs in deflation and recording its third monthly price fall in the past four months,” he said.
ABS indicated that housing inflation was among the crucial components of the annual movement for the monthly CPI, marked at 1.8 per cent, down from 2.1 per cent in January.
Rent prices rose 5.5 per cent over the 12 months to February, marking their slowest annual growth since March 2023 which, according to ABS data, aligns with the increasing vacancy rates across most Australian capital cities.
Wu said that experts anticipate a continued moderation in rent inflation.
“This expectation is consistent with the earlier moderation in advertised rents and the rise in rental vacancy rates across the capital cities,” he remarked.
New dwelling price growth also slowed to 1.6 per cent in the 12 months to February, the lowest annual rise since May 2021.
ABS said that in response to this lower figure, home builders have introduced discounts and promotional offers to attract buyers.
Pilkington said that the CPI figures reinforce the likelihood of additional rate cuts, offering much-needed relief for home buyers and improving affordability.
“Together with the budget forecasts of increased dwelling investment over the next three years, suggests some long overdue optimism,” Pilkington said.
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