Soaring property and petrol prices push inflation higher

·2-min read
Petrol pumps, houses and Australian money
Inflation was pushed higher by soaring petrol and property prices. (Source: Getty)

Consumer prices have risen 3 per cent over the past 12 months driven by a leap in petrol and property prices.

The Consumer Price Index (CPI) rose 0.8 per cent in the September quarter, according to the latest data from the Australian Bureau of Statistics (ABS).

Head of Prices Statistics at the ABS, Michelle Marquardt said the most significant price rises in the September quarter were new property (up 3.3 per cent) and petrol (up 7.1 per cent).

"Rising fuel prices also contributed to the September quarter CPI increase, with the CPI's automotive fuel series reaching the highest level in its half-century history."

The Aussie dollar spiked on the back of the announcement and the ASX took a tumble.

Soaring property market

It wasn’t just the cost of buying a home that put pressure on Australians, but also those renting saw an increase.

Rents rose 0.2 per cent, with most cities seeing an increase but that was partly offset by falls in Sydney and Melbourne which were stuck in harsh lockdowns.

"A two-speed rental economy remained evident in the September quarter," Marquardt said.

"Low vacancy rates drove price rises in Brisbane, Adelaide, Perth, Hobart, Darwin and Canberra, while high vacancy rates, particularly for inner cities properties, saw rental prices fall in Sydney and Melbourne on both a quarterly and annual basis."

On top of this, the cost of building a new home also rose, with the ABS saying those rising costs were passed on to consumers.

"Construction input costs such as timber increased due to supply disruptions and shortages,” Marquardt said.

Combined with high levels of building activity, this saw price increases passed through to consumers.”

Global supply disruptions

Global supply disruptions resulted in price rises for some items including furniture (up 3.8 per cent), motor vehicles (up 1.4 per cent) and audio-visual equipment (up 1.8 per cent).

The most significant price falls were fruit (down 8.3 per cent) due to favourable growing conditions for berries, avocados and citrus fruits, and reduced demand from the food service industry, as a result of lockdowns in Sydney and Melbourne.

Clothing prices also fell (down 5.5 per cent) as retailers were not able to offset winter stock due to sweeping lockdowns.

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