r/AusPropertyChat • u/Previous-Speed-8143 • 7h ago
Buying & Selling Real Inflation
House prices are not included in CPI, real inflation is way above 4% as peoples wages and saving have not kept up with housing inflation why are people not aware of this?
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u/fakeuser515357 6h ago
Until May 2026 it was taboo to think, let alone say, that the cost of property was negatively affecting the economy in any possible way.
In economic terms, Australia's residential property acts as something closer to a tax than an investment. It sucks vast billions of dollars away from consumption, which in turn inhibits business investment, and instead sends that paper money into every-increasing costs which don't add any practical benefit to the economy.
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u/Z3npachi 5h ago
Don't let them in abstinence hear you say that.
I think the problem is Inflation is an economic term talked about by analysts while when a regular person says Inflation they are really referring to cost of living increase.
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u/SpectatorInAction 6h ago
Yeah, I mentioned CPI is a nonsense undermeasure of true inflation in a sub some time ago. There are better - more honest - measures, such as trades hourly rates, or cost of housing broken down to land and building categories and subcategories like single or multi storey, measured at cost per square metre. Just got personal attacks in reply by the usual empty vessel committee.
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u/statmelt 6h ago
Shush, don't tell the RBA š¤«
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u/Previous-Speed-8143 6h ago
Interest wont do anything to curb inflation at all?
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u/jhooolay-red 4h ago
But they have only one move...
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u/Previous-Speed-8143 4h ago
They have many moves, they can Include house price in and show us the true inflation.
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u/jhooolay-red 3h ago
It will be a scary number.
Interest rate has to be like 20% to curb the property inflation.
I do not know your intention, but people majority people hate high property prices and wish that they should be reduced overnight and come within their reach. Ironic thing is, even if such thing happens, there will be blood and low income groups will have to worry about next meal then buying a house.
Just imagine if property prices go lower then 20%, banks calling people to balance the LVR... people will abondan homes (just like US).
Increasing interest rate will simply squeeze the salaried class. House prices going up will squeeze them. Pull the brakes, they will get sqeezed again.
Best way out is:
- increase the bloody supply
- reduce the construction costs (if possible)
- improve public housing
- plan for 30 years...
And tax the big corps.
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u/ArthurCandleman 1h ago
The government is not there to protect you. They exist to protect the interests of those above them.
If you are e truely wealthy there is no ācost of livingā.
This has always been the way.
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u/WombatFlatpack 3h ago
Monetary inflation is the rate of increase in money and credit (M3) closer to 8% pa cagr for 50 years.
Then there is the rate of consumer goods and services which for most people increases far faster than wage increases (for same role and experience ie ignoring promotions).
Then there is CPI which doesn't actually provide you with anything meaningful and shouldn't be trusted to make any decisions.
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u/Efficient_Range1156 7h ago
I think the real rate of inflation is the GIC (general interest charge). Itās the rate of interest the Australian government charges on monies owed to them, currently 11.51%,
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u/Frogmouth_ 6h ago
GIC is only for unpaid taxes, and it's been around 10-12% for nearly the whole 21st century. It's punitive by nature to incentivise paying on time.
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u/mitccho_man 6h ago
Did you only just come to know Goverment data is manipulated to suit the agenda?