Inflation forecast to fall below target

Inflation easing further in 2025

Westpac guru Justin Smirk released his latest inflation insights here.

As you can see, Westpac expects headline inflation to fall to just 1.7 per cent in June 2025, with outright deflation in durable goods.

Source: Westpac

Core inflation, as measured by the 'trimmed mean' figure is expected to ease to 2.4 per cent. 

Without the Commonwealth Rents Assistance, rental price inflation would've been 1.5 per cent in the December quarter, but even this was the lowest annual pace in years:

Reports Smirk:

"The annual pace of rental inflation was 6.4%yr in the December quarter, down from 6.7%yr in September and the recent peak of 7.8%yr in March 2024. Westpac is forecasting rental inflation to fall to around 4%yr through 2026".

Smirk also noted that there is a strong possibility that energy rebates are extended, thereby representing a downside risk to headline inflation forecasts for 2025.#

In other research news, Eliza Owen of CoreLogic ran some analysis to predict which housing markets would benefit most from interest rate cuts based upon past trends.

The answers included houses in Leichardt in Sydney, houses and units in inner-city Sydney and Melbourne, and higher-end homes in Brisbane.

You can download and read the full report here.

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