Households struggling with mortgage repayments will be buoyed by two lots of good news in the past 24 hours.
The Australian Bureau of Statistics released figures today showing that the annual inflation rate (Consumer Price Index) rose 2.4 percent in the 12 months to February 2025.
This means the figure has stabilised inside the Reserve Bank’s two-to-three percent target zone, increasing the likelihood of further interest rate reductions.
This followed Federal Treasurer Jim Chalmers’s 2025-26 budget speech last night where he said Treasury now expected inflation to be back in the target area six months earlier than previously forecast.
Interest rate rises are used as an instrument to slow economic activity when inflation is running at levels that are considered damaging to the economy.
ABS head of prices statistics Michelle Marquardt said annual CPI inflation was slightly lower in February, after holding steady at 2.5 percent for the previous two months.
The largest contributors to the annual movement were food and non-alcoholic beverages (+3.1 percent), alcohol and tobacco (+6.7 percent), and housing (+1.8 percent).
Annual housing inflation was 1.8 percent in February, which fell from 2.1 percent in January.
Rents rose 5.5 percent in the 12 months to February, following a 5.8 percent rise in the 12 months to January.
This is the lowest annual growth in rental prices since March 2023, consistent with rising vacancy rates across most capital cities.
New dwelling price rises slowed to 1.6 percent in the 12 months to February, following a 2.0 percent rise in the 12 months to January. This is the lowest annual rise in new dwelling prices since May 2021 as project home builders offered discounts and promotional offers to entice business.
“Electricity prices fell 13.2 percent in the 12 months to February, compared to an 11.5 percent annual fall to January,” Ms Marquardt said.
“Excluding all Commonwealth and State government rebates, electricity prices would have fallen 1.2 percent in the 12 months to February.”
More details are on the ABS website.
