Inflation Rate Drops to 0%! Experts Urge RBA to Halt Interest Rate Hikes | Sydney Auction Clearance Rate at 56%

Week’s Key Focus

According to the Daily Mail, the latest data reveals that Australia’s inflation rate was at 0% in May. Experts are urging the Reserve Bank of Australia (RBA) to immediately halt interest rate hikes to prevent homeowners from being forced to sell their properties due to loan repayment difficulties.

According to the Consumer Price Index (CPI) released by the Australian Bureau of Statistics, which measures changes in the cost of household goods and services, the official data shows that Australia’s inflation rate rose by 5.6% in the year ending May. However, the average monthly increase in CPI for this year alone was only 0.24%, with no increase recorded in May.

If the average data of the past five months is multiplied by 12, the annual inflation rate stands at 2.8%, within the inflation target range of 2-3% set by the Reserve Bank of Australia (RBA). This indicates that the RBA should pause interest rate hikes.

The monthly change table of CPI indicates a steady decline in Australia’s inflation rate. However, these data are not seasonally adjusted and do not account for certain volatile factors such as fruits, vegetables, fuel, and tourism-related costs, which tend to decrease during winter.

Since May 2022, except for April this year, the RBA has announced interest rate hikes after each monthly board meeting. Australia’s official interest rate has also increased from a historic low of 0.1% to the current 4.1%.

Bouris believes that continued interest rate hikes may force many homeowners to sell their properties, stating that “this level of rate hikes could cause all small business owners and borrowers to lose the incentive to invest.”

Following the release of the latest inflation data, Australian Treasurer Jim Chalmers also stated that the worst period is over. However, major Australian banks anticipate that the RBA will continue raising interest rates in July. Adelaide Timbrell, Senior Economist at ANZ Bank, predicts that the RBA will push the rates up to 4.6%, reaching the highest level in 12 years.

Data released by the Australian Bureau of Statistics this Wednesday also indicates that electricity prices in Australia have risen by 14.1% in the past year, bread and cereal prices have increased by 12.8%, and dairy product prices have increased by 15.1%. Additionally, the cost of takeaway food and dining out has increased by 7.7%, while overall food and non-alcoholic beverage prices have risen by 7.9%. Housing costs, including rent, mortgage payments, and utilities, have increased by 8.4%, while fruit and vegetable prices have risen by 2.7%, and gasoline prices have fallen by 8%.

Auction Results This Week

  • Sydney: 363 properties participated in auctions, 231 auction results reported, 130 properties sold, with a clearance rate of 56%, total auction value of AUD 176,573,500, and a median house price of AUD 1,508,000.
  • Melbourne: 347 properties participated in auctions, 267 auction results reported, 174 properties sold, with a clearance rate of 65%, total auction value of AUD 157,867,450, and a median house price of AUD 950,000.

Top 5 Auction Prices in Sydney Last Week: Houses

▼TOP 1. AUD  $6,000,000

Address: 22 Catherine St, St Ives NSW 2075

Land Size:  696 sqm

House | 5 Bed | 4 Bath | 2 Parking

▼TOP 2. AUD  $5,700,000

Address:19 Claremont Rd, Burwood Heights NSW 2136

Land Size:  917 sqm

House | 5 Bed | 5 Bath |2 Parking 

▼TOP 3. AUD  $4,300,000

Address: 8 Park Av, Gordon NSW 2072

Land Size:  930 sqm

House | 5 Bed | 3 Bath | 5 Parking

▼TOP 4. AUD  $3,800,000

Address: 19A Burlington St, Monterey NSW 2217

Land Size:  1012 sqm

House | 5 Bed | 3 Bath | 2 Parking 

▼TOP 5. AUD  $3,750,000

Address: 11 Olive St, Paddington NSW 2021

Land Size:  142 sqm

House | 3 Bed | 2 Bath | 1 Parking

Top 5 Auction Prices in Sydney Last Week: Units

▼TOP 1. AUD   $2,360,000

Address:  59 Morris St, Summer Hill NSW 2287

Duplex| 4 Bed | 2 Bath  

▼TOP 2. AUD   $2,015,000

Address:  14/26 Walton Cr, Abbotsford NSW 2046

Townhouse | 3 Bed | 2 Bath  | 1 Parking

▼TOP 3. AUD   $2,000,000

Address:  2/74-80 Beresford Rd, Strathfield NSW 2135

Townhouse| 4 Bed | 2 Bath  | 4 Parking

▼TOP 4. AUD   $1,910,000

Address: 12/102 Spofforth St, Cremorne NSW 2090

Unit | 3 Bed | 2 Bath  | 2 Parking

▼TOP 5. AUD   $1,890,000

Address: 7 Bayswater St, Drummoyne NSW 2047

Duplex| 4 Bed | 2 Bath   | 1 Parking

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