Brett Warren , National Director – Metropole Group
The latest monthly CPI data shows inflation rose 2.8% over the year to July 2025 – up from 1.9% in June. While that’s a noticeable jump, it’s important to look beyond the headline and understand what’s driving the change.
Housing costs were a key contributor, rising 3.6%, largely due to a spike in electricity prices, according to the ABS.
Interestingly, this was influenced by timing quirks in the Commonwealth Energy Bill Relief Fund, which temporarily increased out-of-pocket costs for households in NSW and ACT. These rebates are set to resume in August, which should help ease pressure.
Food and non-alcoholic beverages rose three per cent, with coffee, tea, and cocoa seeing the biggest increases – courtesy of global supply issues. Meanwhile, rents rose 3.9%, showing signs of stabilisation, and new dwelling prices remained flat, reflecting a subdued construction market.
So, what does this mean for interest rates?
It’s worth remembering that the Reserve Bank of Australia (RBA) bases its cash rate decisions on the quarterly CPI – not the monthly indicator. It also considers a broader range of economic signals, including employment, wage growth, and global trends.
So, while this monthly uptick may grab headlines, it’s not the full story.
For property investors, the fundamentals remain strong. Stable rental growth, easing construction costs, and resilient demand continue to support long-term opportunities. At Metropole, we’re focused on helping clients navigate these shifts with clarity and confidence.
As always, context is key and we’re here to help you interpret the data, not just react to it.
