The March 2011 quarter Consumer Price Index (CPI) for the housing group, increased 1.3 per cent, compared to the all groups increase of 1.6 per cent. These figures increased 4.8 per cent and 3.3 per cent respectively over the twelve month period. Whilst the housing group is up from the 0.6 per cent level of the previous quarter, the annual rate of increase is the lowest since the September quarter of 2007.

Contributing to the annual increase of 4.8 per cent for the housing group, were substantial increases in the price of utilities – 11.7 per cent for electricity, 12.8 per cent for water and sewerage and 6.2 per cent for property rates and charges.

Rents increased by 4.5 per cent for the year on a weighted average eight capital city basis and the cost of house purchase increased 2.6 per cent.

President of the Real Estate Institute of Australia (REIA), Mr David Airey said, “The Reserve Bank of Australia (RBA) consumer prices measures of weighted median and trimmed median are 2.2 per cent and 2.3 per cent respectively for the year – well within their target zone of 2-3 per cent.”

“Despite the March quarter CPI being the highest since the June quarter 2006, inflation is under control, with a slow-down in the annual rate of increase on the two RBA measures over the last year,” he said.

“The March figures include increases of 16 per cent for vegetables and 14.5 per cent for fruit, which are to be expected as one-off occurrences, following this year’s flooding and cyclones in
Queensland and Victoria,” he continued.

“The message for the RBA is clear; rates do not need to be increased next week. Increasing rates will only cause greater mortgage stress for home owners and discourage buyers,” Mr Airey concluded.

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