While inflation continues to be worryingly high, it may have peaked and is expected to fall in 2023.
The Australian Bureau of Statistics’ latest data shows that inflation rose from 6.9% in October to 7.3% in November.
In early December, the Reserve Bank of Australia (RBA) forecast that inflation would “peak at around 8%” in December.
If that’s the case, inflation may already be cooling. This is expected even though the next inflation announcement (of the December result) may show an increase on the previous period.
Inflation is expected to fall in 2023, according to the RBA, before falling further in 2024, to “a little above 3%”. Three two major contributing factors for the expected decline are:
- ongoing resolution of global supply-side problems
- recent declines in some commodity prices
- slower growth in demand
The construction industry already feels the peak of inflation as the rise in construction costs has started to slow down in December 2022. It would continue to slow down in 2023 due to the softening of the prices of building materials.
The RBA has said that high inflation “damages our economy and makes life more difficult for people”. So it’s determined “to re-establish low inflation and return inflation to the 2-3% range over time”.
Furthermore, the latest data from Australian Bureau of Statistics shows that while the price increase of new homes have started to ease, rental prices still continue to rise across the capital cities.
With that in mind, it is worth considering diving into the rental property market to take advantage of the rising rental prices. If you’d like more information, please contact us and we”ll be happy to discuss your objectives and requirements.