Media Release | March Consumer Price Index Statement

29 Apr

min read

Media Release | March Consumer Price Index Statement

29 Apr 2026

min read

Following today's release of the monthly Consumer Price Index(CPI) by the ABS, the following statement can be attributed to Oliver Hume Property Group Chief Economist, Matt Bell.

Our first official inflation data with some partial impacts of the Middle East war has come in, and the results were a touch better than the market expected. Underlying inflation was steady at 3.3% and headline inflation moved up to 4.6%, below the 4.8% the market was expecting. Today’s result only includes one month of global driven inflation, and the following monthly prints will be followed closely.

Today’s inflation result isn’t going to change our property view for the rest of 2026, but it confirms what we know is already happening. Costs are rising quickly, and the impacts are likely to broaden in April and May. Transport costs for materials and labour suppliers have risen and are being built into upcoming price increases which will end up being borne largely by consumers. The key question remains how long will elevated building cost inflation persist.

Most of the short-term impact has been via fuel inflation, and the impacts of that are expected to broaden in April as that cost increase flowed through to more goods and services. Headline inflation is still forecastto rise to between 5% and 6% by June, with underlying inflation expected to push up toward 4.0% by the end of the year.

Prior to today’s result, the market had priced in a 75% chance of a 0.25% hike in May, with another 1 or 2 to be delivered by the end of 2026.This is unlikely to move too much in light of today’s results. The RBA will have to balance the deteriorating inflation outlook with impacts of increased global uncertainty on economic activity and wealth. The unemployment rate stubbornly holding at 4.3% in March won’t have helped an RBA looking to take some heat out of the economy.

Housing inflation lost its crown as the largest contributor to inflation. Transport (where fuel inflation hit 24.2% for the year) and clothing both shot past it in March. It fell from 7.2% to 6.5% as electricity inflation continued to fall, while New Housing inflation rose from 3.7% in February to 4.5% in the year to March.

The rise was driven by project home builders raising base prices to pass through higher labour and materials costs over the year. Unsurprisingly, Housing inflation was highest in those markets struggling with supply and with the strongest house price growth (Brisbane, Perth and Adelaide).

The outlook for property for the remainder of 2026 has become as uncertain as the outlook for the Middle East crisis and rates. Fundamentals remain in place for ongoing strong demand, but plunging consumer sentiment and a potential return to excessive construction cost growth are serious risks.