New inflation data from the Australian Bureau of Statistics shows the consumer price index rose 7.3 per cent in the twelve months to November, up from October’s 6.9 per cent.
The latest readings mean that inflation has returned to a 32-year high point (also recorded in the September quarter).
The most significant price rises over the 12 months to November were housing (up 9.6 per cent); food and non-alcoholic beverages (up 9.4 per cent), transport (up 9 per cent); furniture, household equipment and services (up 8.4 per cent); and recreation and culture (up 5.8 per cent).
“The housing group was the main contributor to the annual increase in the November monthly CPI indicator,” Michelle Marquardt, ABS Head of Prices Statistics, said.
“High labour and material costs contributed to the annual rise in new dwelling prices although the rate of price growth for new dwellings has eased compared to the 20.4 per cent annual rise seen in October,” she added.
Separate ABS figures also indicated retail spending increased from 1.4 per cent in November, likely a result of Black Friday sales.
The figures are likely to put pressure on the Reserve Bank of Australia (RBA) to recommence rate hikes when it holds its February board meeting.
RBA Governor Philip Lowe has previously cited inflation as being a key driver behind rate hikes.
“The Board’s priority is to re-establish low inflation and return inflation to the 2–3 per cent range over time,” Dr Lowe said in December.
He warned that high inflation “damages our economy and makes life more difficult for people”.
Treasurer Jim Chalmers told the Australian Financial Review that the figures did not include all of the energy price rises resulting from “Russian aggression”.
“There is also uncertainty around the impacts of ongoing flooding that continues to devastate communities across the country,” Dr Chalmers said.
Wait for December’s inflation figures: REIA
Real Estate Institute of Australia (REIA) President Hayden Groves said that while the latest figures were an increase on October they remained below forecasts of 7.75 per cent and RBA predictions of 8 per cent.
He said that the overall inflation figure for housing was actually down on October’s reading of 10.5 per cent.
New dwelling price growth, in particular, has declined, though rent prices had undergone a slight uptick.
“Whilst new dwelling prices rose 17.9 per cent in the year to November, the rate of price growth eased in November compared to the 20.4 per cent annual rise in October,” Mr Groves said.
He argued that the November readings indicated inflation had peaked, and that the RBA should take a pause.
“With the RBA Minutes of its December 2022 meeting showing that the Board expected a sustained decline in inflation in 2023 and the current CPI suggesting that the CPI has peaked, it is time for the RBA to ease up on its interest rate hikes at its first meeting in 2023 in February,” he said.
“At that time, it will have the December quarter figures for the CPI,” he added.