It is well known that inflation has been a key influencer of the Reserve Bank of Australia's interest rate decisions over the course of the year with the Bank aiming for a target range of 2 – 3 per cent over 2012 and 2013.
While the official inflation data, the Consumer Price Index released by the Australian Bureau of Statistics, is not due until early 2012, the recent release of the TD Securities-Melbourne Institute Monthly Inflation Gauge for November also provides an indication as to how inflation is faring.
The Inflation Gauge fell by 0.1 per cent in November 2011, following a 0.1 per cent rise in both October and September. In the 12 months to November, the Inflation Gauge rose by 2.1 per cent, following a 2.6 per cent rise for the 12 months to October.
The Inflation Gauge showed that this overall change was due to price rises for household appliances, utensils and tools, furniture and furnishings and new dwelling purchases by owner-occupiers.
Such increases were offset by falls in fruit and vegetables, automotive fuel and holiday travel and accommodation.
In his statement following the Reserve Bank's decision to cut interest rates to 4.25 per cent last week, Reserve Bank Governor Glenn Stevens confirmed that "the Bank's current judgement is that inflation is likely to be consistent with the 2-3 per cent target in 2012 and 2013, abstract from the impact of the carbon pricing scheme."
While further news on the movement in inflation for the December quarter will be available from the ABS early next year, this Inflation Gauge and the outlook of the Reserve Bank (in terms of the direction of inflation) looks to be good news for many mortgage holders and prospective buyers who are in a financial position to purchase a property.
For more information about suitable properties available for purchase in your area, please stop by a Century 21 real estate office for expert and professional advice.