The all-important quarterly Consumer Price Index data shows a considerable slowing in inflation to 0.2% in the September quarter, compared with 1% in the June quarter.

It brings the annual CPI inflation rate to September 2024 to 2.8%, significantly down on the 3.8% rise in the 12 months to June 2024.

The quarterly drop reflects the federal government’s energy rebate, effectively cutting power costs for all Australian households, as well as additional state energy subsidies in Queensland, Western Australia, and Tasmania.

Overall, electricity prices fell 17.3% in the September quarter and 15.8% over the past 12 months.

The September CPI figures also covered the government’s stage three tax cuts which effectively put more money back into the consumers' pockets but appear not to have added to inflationary pressures as some commentators had feared.

Where inflation is still biting

The quarterly figures show a considerable drop in goods inflation, down to 1.4% in the September quarter compared to 3.2% in June.

This was due to significant falls in electricity and automotive fuel prices, the Australian Bureau of Statistics (ABS) said.

But annual services inflation came higher than the previous quarter at 4.6% in the September quarter - up 0.1% - reflecting higher prices for rents, insurance, education, medical, dental, and hospital services.

Rent, food prices up

Rental costs also rose 6.7% over the 12 months to September but that was down from 7.3% at the end of the June quarter. 

Changes to Commonwealth Rent Assistance helped take the edge off the real rise in rents, the ABS said.

Food costs also increased by 3.3% in the year to September, driven largely by higher fruit and vegetable prices.

Underlying inflation also slows

While it looks like good news for people with a mortgage holding out for a rates cut, the Reserve Bank of Australia (RBA) is more concerned with underlying inflation, a measure that removes items with volatile pricing changes.

Wednesday’s data shows trimmed mean inflation has come in at 3.5%, a drop on the 3.9% figure recorded in the June quarter.

It indicates inflation is heading in the right direction but it’s unlikely to spur a cut in the cash rate when the RBA board meets on Monday and Tuesday next week.

RBA governor Michele Bullock has repeatedly told Australians there will be “no rate cut until the board is confident that inflation is moving sustainably towards the 2-3% target band”.

By ‘inflation’, Ms Bullock means the trimmed mean figure which, at 3.5%, is certainly moving towards the target band but is not yet within it.

Equity markets have the likelihood of a rate cut on Melbourne Cup Day at just 10%.

The quarterly trimmed mean figure of 3.5% has also come in above the Commonwealth Bank's prediction of 3.4% which is likely to see Australia's biggest bank ditch its forecast of an interest rate cut in December.

CommBank had been the outlier among its big four peers who are all expecting the RBA to cut the cash rate in February 2025.

Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance. 90% LVR
  • Fast turnaround times. Can meet 30-day settlement
  • No monthly or ongoing fees, split with low-rate variable loan
 Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
Apply in minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely – Access your additional payments when you need them
  • Home loan specialists available today
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Image by Sahil Shettigar on Unsplash



Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

Download Free
By subscribing you agree to our privacy policy