Housing spearheads annual November 7.3% CPI jump: ABS

The Monthly Consumer Price Index (CPI) indicator rose 7.3 per cent in the 12 months to November 2022, the joint-highest CPI figure since 1990, according to new figures.

The last time CPI reached this level was in September 2022.

The increase was driven by continued demand in the housing sector, the Australian Bureau of Statistics (ABS) has confirmed.

ABS head of prices statistics, Michelle Marquardt, said: “This month’s annual movement of 7.3 per cent compares to 6.9 per cent in October and 7.3 per cent in September, indicating ongoing inflationary pressures.”

According to the ABS data, the most significant contributors to the annual rise in November were: housing (+9.6 per cent); food and non-alcoholic beverages (+9.4 per cent); transport (+9.0 per cent); furniture, household equipment and services (+8.4 per cent); and recreation and culture (+5.8 per cent).

Ms Marquardt added: “The housing group was the main contributor to the annual increase in the November monthly CPI indicator.”

“High labour and material costs contributed to the annual rise in new dwelling prices (+17.9 per cent) although the rate of price growth for new dwellings has eased compared to the 20.4 per cent annual rise seen in October."

Fewer payments of government construction grants compared to November 2021 also contributed to the rise in new dwelling prices.

Rising rental prices have also fed into the increased CPI, with the weighted average of rents in the eight capital cities up 3.6 per cent in the 12 months to November.

This was up from 3.5 per cent in October, which the ABS said reflected a "tight rental market".

Prices continually driven upwards

Prices for all food and non-alcoholic beverage categories remained elevated compared to November 2021, the ABS explained.

Meals out and takeaway food (+7.3 per cent) was the main contributor to the annual increase in this category.

Ms Marquardt stated: “Increasing operating costs, including wages, electricity, and weather-affected reductions in food supplies continued to drive prices up.”

“In the transport group, we saw some flow-on impact from the restoration of the Australian government’s fuel excise in November’s higher automotive fuel prices.

“These rose 16.6 per cent in the year to November up from 11.8 per cent in October.

“Average prices for unleaded petrol peaked at just over $2 in early November before falling to just under $1.80 by the end of November,” Ms Marquardt explained.

Other contributors to the rise

Additionally, the ABS data found that the furniture, household equipment and services group rose 8.4 per cent for the year. This was primarily due to increases in prices for furniture, which occurred mid-2022 due to “higher freight and raw materials costs”. Increases in the costs for cleaning and maintenance products were also a strong contributor to the increase for this group, the independent statutory agency added.

Recreational and cultural activities-related prices have also increased compared to a year ago, the data revealed.

There have been several strong annual movements in the holiday travel and accommodation group during 2022 as prices recover from Covid-19 related lows, the ABS explained. November’s annual movement of 12.8 per cent was the second highest since the monthly CPI indicator data series began in September 2018.

Ms Marquardt noted: "November’s monthly increase of 4.3 per cent for holiday travel and accommodation departs from the falls usually seen in November following the September and October school holiday period.”

“High jet fuel prices combined with strong consumer demand in November pushed airfare prices up, with accommodation prices also rising,” she said.

[Related: Housing prices drive up CPI]