Housing Costs Rise Faster than CPI

Housing costs are now rising faster than headline inflation, highlighting a structural tension that interest rate increases alone may not resolve. Housing costs lifted 5.5% ov

er the year to December, outpacing the 3.8% rise in headline CPI, according to the Australian Bureau of Statistics.

Ray White chief economist Nerida Conisbee argues that while higher interest rates can moderate house price growth, they do little to address planning delays, elevated construction costs and structural supply constraints.

This dynamic has direct implications for residential property values across Melbourne’s established councils, including Manningham and Whitehorse. Tighter monetary policy can temper buyer borrowing capacity and slow short-term price momentum. At the same time, constrained new supply and sustained rental growth can underpin asset values, particularly in well-located, supply-limited suburbs.

The result is a more complex valuation environment. Asset values may soften in response to reduced borrowing capacity, yet structural undersupply can support pricing resilience over the medium term. Understanding how these opposing forces interact at a suburb level is critical when assessing lending security, balance sheet exposure or potential recovery outcomes.

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Clear, independent valuation advice is essential when monetary policy and housing supply pressures are pulling in different directions. To obtain evidence-based assessments tailored to assets in Manningham, Whitehorse and surrounding councils, call Mason’s Valuation Office on 0417 741 481 or visit https://propertyvaluation.melbourne/about-us/#contact.