Skip to content
Building Construction

Inflation drops to 2-year low but housing still a source of pressure

Master Builders Australia 2 mins read

31 January 2024

The annual rate of inflation dropped to 4.1 per cent during the December 2023 quarter, the lowest since December 2021.

 

After a peak of 7.8 per cent in late 2022, price pressures have steadily abated over the course of 2023.

 

Master Builders Australia chief economist Shane Garrett said ahead of the RBA’s first meeting on rates next Tuesday, today’s figures will bolster hopes that the last of the rate increases is behind us.

 

“However, there are a number of grounds for caution in terms of the latest inflation figures.

 

“The cost of new dwelling purchase was up by +1.5 per cent in the December 2023 quarter alone. Cost pressures here are still much stronger than anyone would like and are being prolonged by the labour shortages in our industry.

 

“Rents rose marginally, at 0.9 percent, during the December 2023 quarter. This outcome was helped by recent enhancements to government rent assistance, which partly muffled market-driven rental price growth. Without these government supports, rental price increases would have been much bigger.

 

“The imbalance between demand and supply in the rental market still represents a major challenge. It has resulted from years of underbuilding on the higher density side of the market and can only be resolved by significantly increasing the output of new homes over a sustained period.

 

“The latest inflation figures clearly show that housing costs are still a source of pressure. As well as hurting living standards, excessive housing costs tend to restrict the supply of labour, force wages higher and hurt our economic competitiveness.

 

“Labour productivity in our industry is 18 per cent lower than it was a decade ago. Better outcomes here would be a winner for everyone.

 

“Government policy needs to focus on building productivity rather than dismantling it.”

 

Media contact: Dee Zegarac, National Director, Media & Public Affairs

0400 493 071 | dee.zegarac@masterbuilders.com.au

Media

More from this category

  • Building Construction
  • 27/02/2024
  • 11:26
Master Builders Australia

Builders urge Greens and Coalition to back Help to Buy

In the midst of political wrangling, Master Builders Australia urges Parliament to adopt sensible housing policies that benefit both aspiring homeowners and encourage more housing supply. CEO Denita Wawn said the industry was strongly supportive of the Help to Buy Scheme which will assist some homebuyers in acquiring their first home. “Those qualifying for the equity contributions will be able to purchase the home with a deposit as low as 2 per cent of the purchase price. “The Help to Buy scheme will be rolled out at the same time as the National Housing Accord, an initiative which includes the…

  • Contains:
  • Building Construction, Environment
  • 27/02/2024
  • 10:00
Holcim Australia Pty Ltd

Holcim Australia and FMD join forces to accelerate decarbonisation strategy

Global leader in innovative and sustainable building solutions, Holcim, and Foton Mobility Distribution (FMD), an Australian owned distributor of new energy efficient vehicles, announce…

  • Contains:
  • Building Construction
  • 27/02/2024
  • 07:21
Australian Constructors Association

WGEA reporting a step in the right direction

The Australian Constructors Association (ACA) welcomes today’s release of employer gender pay gaps by the Workplace Gender and Equality Agency (WGEA). ACA President Annabel Crookes said the publishing of gender pay and leadership data is important for improving diversity in the construction industry. “Gender diversity is still a challenge for the construction sector. The gender imbalance is one of the toughest problems we have to solve, because it gives rise to so many other cultural issues which are blockers for improving diversity for all,” said Ms Crookes. “The urgent need for change, starting at the top, prompted ACA to take…

Media Outreach made fast, easy, simple.

Feature your press release on Medianet's News Hub every time you distribute with Medianet. Pay per release or save with a subscription.