People around Australia have been seeing the advertised prices of rents increasing, now the inflation figures are catching up.
One of the problems with the Consumer Price Index is it can sometimes take a while for price rises to flow through and appear in the data. This is very much the case with rent prices.
Over the past few months, people across Australia have been seeing the prices for advertised rental properties rising sharply as interest rates have raised the cost of borrowing. And yet the actual price of rents in the CPI figures have not really moved much.
The problem is that the Bureau of Statistics measures not just new rental prices, but the average of all rents. Because most people are on 6, 12 or even 18-month contracts, the prices of their rents take longer to increase than the new ones advertised.
But eventually, the reality on the ground appears in the data, and that is what we are seeing now.
Across Australia in the September quarter, rental prices rose by more than 1% in every capital city. That is the first time that has happened since March 2009.
In Sydney, Melbourne, Brisbane and Adelaide rental prices are rising faster than they have for more than a decade.
The cost of living crisis has been felt in many areas but the experience in the real world has not always been reflected in the data. No longer is that the case – rental prices are rising and they are likely to keep doing so so long as the Reserve Bank keeps raising interest rates.