CapitalVue - June 24 CPI update
📊 CPI Data Analysis: June 2024 Quarter 📊
The latest Consumer Price Index (CPI) data reveals a 1.0% rise this quarter, with an annual increase of 3.8%. Key contributors to this quarterly rise include Housing (+1.1%), Food and non-alcoholic beverages (+1.2%), Clothing and footwear (+3.1%), and Alcohol and tobacco (+1.5%). Source - ABS
🏠 Impact on Housing Market
The housing sector saw a notable increase, driven by a 2.0% rise in rents and a 1.1% increase in new dwellings purchased by owner-occupiers. The tight rental market and low vacancy rates continue to push rental prices higher, reflecting ongoing supply constraints and high demand. Source - ABS
💰 Interest Rates Outlook
Despite the inflationary pressures, the Reserve Bank of Australia (RBA) is expected to maintain the current interest rates, with a lower likelihood of further hikes. In fact, there are forecasts suggesting a potential decrease in interest rates on the horizon as inflation stabilises. This could provide some relief to borrowers and potentially stimulate housing demand.
📈 Market Sentiment
The market sentiment remains mixed. While some expect a slowdown in housing demand due to higher living costs, others believe that the potential for lower interest rates could support home values and encourage investment
🔍 Key Takeaways
• Housing Market: Continued pressure on rental prices and new dwellings.
• Interest Rates: Potential for further hikes to curb inflation.
• Investor Strategy: Monitor interest rate trends and adjust investment strategies accordingly.
Stay informed and adapt your strategies to navigate these economic shifts effectively. 🏡📈
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