Real Estate Institute of Australia (REIA) declared support for revisions of the Consumer Price Index (CPI) made by the Australian Bureau of Statistics.

REIA put forward a submission to the Review and is pleased with the changes, however, would have liked to see the inclusion of the following recommendations:

  • The introduction of a rent index for private and government landlords and a house purchase first home buyer index;
  • A break-down of the house purchase index into new home purchases and major home improvement to existing homes and fixed appliances, and;
  • The introduction of a rent and house purchase index for both metropolitan and non-metropolitan areas.

"The abovementioned recommendations aimed to improve the analysis of the residential property market, particularly affordability changes in specific subgroups and segments of the market, such as first home buyers and tenants in the public rental sector. REIA's recommendations would have also assisted in comparing dynamics between metropolitan and non-metropolitan areas," said REIA President, David Airey.

The group's submission to the Review of the Consumer Price Index endorsed the principal purpose of the CPI as a general measure of household inflation and called for the production of a high quality monthly CPI, rather than quarterly, to support more timely and responsive economic management.

"Our submission recommended that the acquisitions approach should remain as the main approach for the construction of the CPI as it is a more accurate measure of price changes and therefore assists in making monetary policy decisions," said Airey.