Chapter 1: What is the main topic discussed in this episode?
It's the Real Estate Podcast across every state, city and town of Australia. And welcome to another episode of the Real Estate Podcast available on iHeartRadio every morning and also on Spotify and Apple and wherever you get your podcast from. It's another Tuesday. Yes, the 23rd day of August. We are just about into September and it's nice to see some of the temperatures starting to lift.
I've noticed people feeling a little bit better about things in these uncertain times that we live in. Nothing like a little bit more sunshine. Coming up this morning, we are going to be talking to Michelle from the Australian Bureau of Statistics. And in a lot of ways, the people who work there like Michelle are the unsung heroes of the inflation that we are going through.
because they manage to track prices and do all sorts of things behind the scenes that we just tend to take for granted. But it's important work, and that helps you and I break down not only things like groceries and petrol, but also looking at real estate statistics. So we'll talk to her in just a moment.
Coming up tomorrow, we're going to be checking in on Hobart and looking at some positivity where their listings numbers are climbing towards pre-pandemic levels. Yes, the latest PropTrack listings report tells us that there was a 70%, 70% increase increase year on year in the total number of Hobart homes listed for sale.
Chapter 2: What role does the Australian Bureau of Statistics play in tracking inflation?
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Chapter 3: How does the Australian Bureau of Statistics collect price data?
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It's The Real Estate Podcast across Australia, seven days a week. Okay, so let's bring in Michelle Marquardt. She is the Program Manager for the Prices Statistics at the Australian Bureau of Statistics. And a very good morning to you, Michelle. Welcome to The Real Estate Podcast. Thanks for having me. So let's just step over what it is that you do.
It sounds awfully important there, Michelle, the Programme Manager for Price Statistics. What is that exactly?
So I look after all our different price indexes that we create.
Chapter 4: What are the differences between the Consumer Price Index and Living Cost Index?
So people have probably heard about the wage price index, the consumer price index, which is about inflation. We've also got some smaller indexes, the living cost indexes and producer price indexes. and international trade price indexes. So quite a lot of different indexes that show different parts of the economy and how prices are travelling.
Okay, and of course it's so important to know how the economy is travelling. So how does the Australian Bureau of Statistics go about collecting the information?
So we collect it in a whole variety of ways. For the consumer price index, we get scanner data from supermarkets as a big source for food prices and other types of things that they sell through the supermarkets. So that's a record of everything that they sell. So, you know, how many tins of
spaghetti they sell each week and how much people pay for all of that and we also have web bots that scrape the internet to get prices from the internet and we also run some surveys of different businesses.
Okay and two price indexes that you really focus on one is inflation the CPI and the other is the living cost indexes perhaps tell us a little bit about those.
So they're both really interesting for people who are interested in real estate in particular. So we treat the two indexes, treat housing slightly differently. So for that inflation, for the consumer price index, we look at what the cost to build a new house is.
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Chapter 5: How often is the inflation data updated by the Australian Bureau of Statistics?
Whereas for the living cost indexes, we look at how much people are paying for mortgage interest charges. So the reason they're a little bit different is because the CPI, the inflation index, is used by the Reserve Bank to set interest rates.
So to have interest payments in the CPI would all become a bit circular, but it's still interesting for people to understand what's happening to living costs, which is more about what's happening to the interest payments that they're making rather than just buying the new houses.
Yeah, and I think that probably because of the times that we live in, people won't necessarily think about the Australian Bureau of Statistics to turn to for some information. Now, you're going to be releasing a monthly indicator for inflation for the CPI.
So perhaps maybe point people to the information, how they can get that and talk a little bit more now because you are doing it on a monthly basis.
So we put out an information paper on Tuesday that we've got open for public comment all about how we might do a monthly CPI indicator, so a monthly indicator of inflation. And it's showing that over the months, April, May, June, inflation kept going up. So it went up from 5.5 to 6.8 by June, which is a little bit higher than we were showing in the quarterly indicator.
And that just helps people understand sort of what direction it's going, gives everyone a more frequent read on what's happening in the economy around prices.
And how do they access that information? So let's just explain that to people where they haven't thought of accessing it.
Yeah, so that's up on our website on abs.gov.au. So you can just search for Consumer Price Index and that will all pop up and you'll be able to see all the new data that's there.
So let's have a look at the house prices around new dwellings.
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Chapter 6: What are the current trends in housing costs in Australia?
You've got some information there for new house builds which are still going up. Boy, this is a real problem area. Yeah.
Indeed. So we are seeing cost of building new houses continuing to go up. So in the monthly data, what it showed was that it was about 19.5% in April, but by June it had gone up even further to 21%. So that's across the year. So 21% is obviously quite a big increase in costs in just 12 months.
Part of that is about, so there's a lot to do with the costs for steel and timber shortages, but also the home builder grants that government set up about 12 months ago are still flowing through. So a smaller number of people are getting a discount based from home builders. So that's effectively overall increase in the costs for housing as that discount reduces.
And Michelle, we know what some of these major drivers are. We've got the problem out of China, supply, of course. We've also got the Ukraine war. But perhaps tell us a little bit about what is going on around the fuel and those numbers.
Chapter 7: How do fuel prices impact the overall economy and housing market?
Yeah, so fuel has also gone up very dramatically over the last 12 months. So in April it was about 20% increase for the year and that was a bit lower than we've been seeing because of the reduction in the fuel price index. By June it had gone up to 43% increase for fuel over that 12 months and so obviously that's very, very high and is likely to be flowing through to the cost of
other people who are trying to sell products and services. And what about rents? They're a little bit flatter than what people actually might realise. Indeed. So a lot of people hear about what's happening for advertised rents, but obviously in the Consumer Price Index, what we're looking at is rents. for everyone.
So people who are in government rental properties, as well as people who are in private rental properties. So we're not quite seeing those increases come through yet. I like to use an analogy of a bathtub. So the bathtub's full of water at a certain temperature. We've got a hot tap with, you know, the increase in rent prices.
And it just takes a little while for that to flow through to the rest of the bathtub or the rest of the rents. So we're still seeing rents going up at about 1.6% across the year. So that's sometimes not as high as people sort of expect it to be. The other element is that they're not as strong in Sydney and Melbourne as people might think. And they're a big part of the market around the country.
So that holds it down overall when I look at across the whole country.
All right. Well, thanks so much, Michelle, for coming on to The Real Estate Podcast this morning and just explaining some of those key points of what you do there at the Australian Bureau of Statistics.
No worries at all.
Thanks for having me. We connect you to the best real estate information across Australia. The Real Estate Podcast.
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