Low inflation figures for the June quarter suggest historically low interest rates are here to stay for a while yet, which is good news for home buyers and renters, says Malcolm Gunning, president of the Real Estate Institute of Australia.

The consumer price index, which measures changes in the price of a basket of goods and is Australia's measure of inflation, rose 0.2 per cent in the June quarter, making an annual increase of 1.9 per cent.

The  June quarter result was marginally lower than the annual March quarter figure of 2.1 per cent, said Gunning.

The annual change for the June quarter "is below the RBA’s target zone of 2-3 per cent and suggests the continuation of historically low interest rates for some time yet," said Gunning.

The Housing Group category of data rose 0.3 per cent for the quarter, and 2.4 per cent for the year to June 2017. Rents rose only 0.2 per cent for the quarter, and 0.6 per cent for the year. 

“From 2013, when investment in housing started to pick up, we have seen the rate of increase in rents slow down in Australia. For the last three quarters the annual changes have been 0.6 per cent - the lowest annual increase since December 1994," said Gunning.

Gunning said tax incentives for property investment have kept rents low.

“In Sydney and Melbourne, where much of the investor activity has been focussed, the increase in rents in the past twelve months has been 2.5 per cent and 1.7 per cent respectively," he said.

Household fuels were major contributors to the increase in the Housing Group category of data, reflecting higher gas and electricity prices.

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