Slowing rents could spare households another interest rate hike, economist says

Slowing rental market may give Reserve Bank an excuse to keep interest rates on hold, Domain economist Nicola Powell says

On Thursday, Domain published their June Quarter Rent Report, which found rent prices in major cities are either"declining, increasing at a slower pace, or stopping rising altogether." Picture: NCA NewsWire/Jeremy Piper "Commonwealth Rent Assistance has already reduced CPI, although that is a separate measure, but slowing rental growth should make a difference.

Speaking to SkyNews.com.au on Thursday, Westpac senior economist Matt Hassan was more cautious, saying the time taken for asking rates to flow through into the out-of-pocket costs measured in CPI was a"very slow process." "It can take one, two years for those asking rates to show up in CPI, so the RBA really needs confidence other items in the basket are going to show disinflation as well."

The Westpac economist highlighted ongoing concerns about resilient consumer spending and inflation expectations as the main factors that could drive a rate rise, the latter of which wasReturning to rents, Mr Hassan echoed Ms Powell as he cited the Albanese government's increase to Commonwealth Rent Assistance as having a more immediate impact on CPI.

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