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CPI remains within the RBA’s target zone

28 Jul 14

The June 2014 quarter Consumer Price Index (CPI) figures show that the Reserve Bank of Australia’s (RBA) underlying trend series measures of inflation continue to be within its target zone.

Real Estate Institute of Australia (REIA) President, Peter Bushby, says the RBA should maintain the current level of interest rates.

“Whilst in the June quarter, the CPI rose by 0.5% and an annual inflation rate of 3.0%. These figures are still within the RBA’s target zone of 2-3% and should not put real pressure on the inflation outlook,” Mr Bushby said.

“The annual changes for the analytical series of trimmed mean and for the weighted median were 2.9% and 2.7% respectively and compare to the changes for the twelve months to the March quarter 2014 of 2.6% for the trimmed mean and 2.7% for the weighted median,” Mr Bushby said.

The housing group increased by 0.8% for the June quarter compared to 0.6% in the March 2014 quarter - the annual rate of increase of 3.9% is up from 3.6% for the year to March.

The main increases in the June quarter for the housing group were new dwelling purchases by owner-occupiers and rents which increased by 1.6% and 0.6% respectively. For the year to June 2014, the largest increase in the housing group was for water and sewerage (11.1%). Rents increased by 2.4% for the year.

“With inflation under control, a subdued economy and as the RBA itself notes, signs that conditions in the housing market are tempering, it’s appropriate that the RBA Board maintains interest rates at their present level,” Mr Bushby concluded.