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Quarterly Data Suggests Favourable Interest Rate Outlook

06 August 2015
According to the Real Estate Institute of Australia (REIA), the 2015 June quarter Consumer Price Index (CPI) figures support the Reserve Bank of Australia’s (RBA) July assessment that inflationary pressures are well contained and likely to remain this way.
 
REIA President Neville Sanders said this was good news for home owners and should translate into a sustained period of low interest rates.
 
“In the June quarter, the CPI rose by 0.7 per cent and an annual rate of 1.5 per cent. These figures are below the RBA’s target zone of two to three per cent and should not put pressure on the interest rate outlook.
 
“The annual changes for the analytical series of trimmed mean and for the weighted median were 2.2 per cent and 2.4 per cent respectively, and compare to the changes for the 12 months to the March quarter 2015 of 2.3 per cent for the trimmed mean and 2.5 per cent for the weighted median,” Mr Sanders said.
 
The housing group increased by 0.7 per cent for the June quarter and an annual rate of increase of 2.5 per cent.
 
The main increases in the June quarter for the housing group was for new dwelling purchases, which increased by 4.8 per cent, while rents increased by 0.4 per cent for the quarter and 1.9 per cent for the year.
 
“With inflation under control, combined with a slowdown in housing finance, it’s reasonable to expect that the RBA will not be increasing interest rates in the medium term, providing a stable outlook for home buyers,” Mr Sanders said.
 
Source: REIWA
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