Cuts to the official interest rate have helped slow cost-of-living increases for some Australian households.
The latest Australian Bureau of Statistics (ABS) data shows all household types experienced rises in quarterly living costs in the June 2025 quarter ranging from 0.4 percent to one percent.
ABS Head of Prices Statistics Michelle Marquardt said Employee households had the smallest rise in living costs of all household types.
“The last time this happened was in the March 2022 quarter, before mortgage interest rates began rising,” Ms Marquardt said.
She said households with government payments as their main source of income saw the largest rises in living costs.
Ms Marquardt said a significant difference between the Living Cost Indexes (LCIs) and the Consumer Price Index was that the LCIs included mortgage interest charges rather than the cost of building new dwellings.
She said employee households, whose main source of income were wages and salaries, benefitted most from falling mortgage interest charges, which were a larger part of their spending than for other household types.
“Mortgage interest charges fell 1.4 percent in the quarter for employee households, as banks cut interest rates for both variable and new fixed rate home loans following the Reserve Bank of Australia’s decision to lower the cash rate target in February 2025.”
Ms Marquardt said this helped slow annual growth in living costs for Employee households, which was up 2.6 percent in the 12 months to the June 2025 quarter, but down from a 3.4 percent annual rise to the March 2025 quarter.
She said Housing and Food and non-alcoholic beverages were the main contributors to the rise in living costs across all household types.
