Housing Costs Push Inflation Above Expectations

Inflation in Australia rose higher than expected to 3.5% in July, driven by surging housing costs.

The Reserve Bank of Australia's preferred measure of inflation, trimmed mean, remained stuck at 3.6%, its highest point since September 2024 and outside the central bank's target band of 2-3%.

Housing costs were a major contributor to the increase, with new dwelling prices rising 5.7% in the 12 months to July, as builders passed on higher costs for materials and labour.

Russel Chesler, head of investments and capital markets at VanEck, said the inflation result means there will be at least one more rate hike this year, stating 'the inflation fight is far from won'.