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Interest rate cut justified

30 Jan 15

The Real Estate Institute of Australia is calling on the Reserve Bank of Australia to cut current interest rate levels following the release today of the latest Consumer Price Index figures.

The December 2014 quarter CPI figures show that the RBA’s underlying trend series measures of inflation continue to be well within its target zone.

REIA President, Neville Sanders, says this should translate into good news for home owners. “In the December quarter, the CPI rose by 0.2% and an annual rate of 1.7%. These figures are below the RBA’s target zone of 2-3% and should not put pressure on the inflation outlook,” Mr Sanders said.

“The annual changes for the analytical series of trimmed mean and for the weighted median were 2.2% and 2.3% respectively and compare to the changes for the twelve months to the September quarter 2014 of 2.4% for the trimmed mean and 2.3% for the weighted median,” Mr Sanders said.

The housing group increased by 0.5% for the December quarter which was the same as the September quarter and an annual rate of increase of 2.4% The main increase in the December quarter for the housing group was for new dwelling purchases, which increased by 1.1%. Rents increased by 0.5% for the quarter and 2.4% for the year.

“With inflation under control combined with a slow down in housing finance, it’s appropriate that the RBA Board seriously considers a cut in interest rates at their meeting next week,” Mr Sanders concluded.

Media Release courtesy of REIA 28 January 2015