Of course it is! Housing is counted in the CPI. It wouldn't be much use otherwise
that means rents you dummy, house prices are not in CPI !!!
your an embarrassment to the bear cause
It also includes house construction costs.
But existing house prices are not included. This is because the sale of an existing house has both a buyer and seller. It is excluded because from an economic perspective, the transaction nets to zero.
The emergence of a two-speed national housing market suggests Sydney and Melbourne will present the Reserve Bank with a real dilemma.
Despite concerns about unemployment and the high dollar the Reserve left the cash rate on hold at 2.5 per cent on Tuesday.
"The economy may be requiring further stimulation . . . but the dilemma is that we've already got house prices growing solidly in Melbourne and Sydney," said the senior economist at Australian Property Monitors, Andrew Wilson.
Dr Wilson said the Reserve might need to cut rates next month and, while that might help other capital cities, it could increase price growth in Sydney and, to a lesser extent, Melbourne.
The RP Data figures released on Tuesday morning suggest the emergence of a two-speed housing market with strong price growth experienced only in the two biggest cities.
Sydney's home values jumped 2.5 per cent last month alone, and 5.2 per cent in the September quarter.
The Reserve Bank leaves the official cash rate at 2.5 per cent on Tuesday, as widely expected by the markets.
In the words of the immortal Charlie Rich, ''there won't be any more''. The Reserve Bank is done with cutting rates. Expressed in words the market will understand: there is scarcely any easing bias left.
Earlier this year the bank was ending each of the monthly reports that follow its board meetings with a statement that, ''the inflation outlook as currently assessed may provide some scope for further easing, should that be required to support demand''.
Not any more. And not because the inflation could not easily accommodate a further rate cut.
It is because things are turning out as the Reserve Bank hoped they would. The housing market is picking up, just as the bank intended when it started cutting rates. The dollar is much lower (even after the recent lift, it is down 10 per cent in six months). Business and consumer confidence is climbing. And the overseas outlook is more positive than it has been in years, notwithstanding what will most probably be only a short-lived government shutdown in the US.
When you are getting what you want it is wise to give thanks. And not push further.
The Reserve Bank has kept the cash rate at a record low, as improving economic data suggested its easing cycle could be drawing to a close.
Even so, economists said the RBA appeared to indicate it was a ''reluctant rate-cutter'', and would be weighing the recent strength in the Australian dollar against the recovering property sector.
Yet the challenges brought about by a peak in mining investment, if met with an unexpected rise in the Australian dollar and weaker-than-expected third-quarter inflation data released later this month, could push the bank towards one more cut later this year or earlier in 2014, they said.
In a widely expected decision, the RBA on Tuesday left interest rates at 2.5 per cent for the second consecutive month, but gave little indication of its future policy intentions. The move came as the Australian share market fell slightly in choppy trading, after the United States government partially closed down because Congress failed to agree upon a new budget.
''The board judged that the setting of monetary policy remained appropriate,'' RBA governor Glenn Stevens said in a statement on Tuesday, echoing comments made after last month's meeting that were seen to shift the central bank towards a more neutral stance.
''The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.''
The Australian dollar rose more than half a cent, from US93.40¢ to just under US94¢, following the statement. The currency was buying US94.21¢ late Tuesday.
The central bank's decision came as economic data released on Tuesday pointed to signs of a recovery in the manufacturing and retail sectors. Retail sales grew by a seasonally adjusted 0.4 per cent in August, surpassing economists' expectations of a 0.3 per cent rise, boosted by a 6.4 per cent jump in department store sales.
Activity in the manufacturing sector lifted for the first time in two years on the back of a falling Australian dollar and lower interest rates, with the Australian Industry Group's Performance of Manufacturing Index rising 5.3 points to 51.7 in September.
At the same time, capital city home values hit a new record high last month, led by Sydney, which grew 5.2 per cent. In contrast, prices slipped in Hobart by 3 per cent.
National Australia Bank Ltd says the Reserve Bank of Australia is not likely to cut the official cash rate again until February.
In a statement, NAB said the RBA appeared comfortably on hold with the economy expected to underperform over the coming year.
"Higher unemployment and the commensurate downward pressure on inflation will be the triggers for a further easing by the RBA but probably not until early 2014," NAB said.
The bank does not expect increases in the cash rate until 2015.
The central bank yesterday left the cash rate on hold at a record low of 2.5 per cent, giving no indication of a specific easing bias.
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