Price pressures: Cost of living worries in Sydney at an 11-year high

Sydney’s consumer price index rose 4.4 per cent in the year to March, the biggest annual increase in 13 years. But not everything became more expensive.

The price of electricity fell 4.9 per cent in the same period while prices for garments for women were down 3.4 per cent. Rent prices in Sydney fell 1.2 per cent over the year despite a 0.2 per cent increase in the March quarter.

Sydney had the lowest CPI growth among the capital cities in the year to March – inflation was highest in Perth (up 7.6 per cent for the year) and Brisbane (up 6 per cent).

AMP chief economist Shane Oliver said rents were one reason Sydney’s CPI has not risen by as much as other cities.

“Rental price growth has been weaker in Sydney and Melbourne than in other states,” he said.

The economic disruption caused the Delta and Omicron outbreaks, which was more acute in NSW and Victoria than other states, may also have helped keep inflation pressures more muted in Sydney and Melbourne than other capitals.

Differences in spending patterns mean some household types are experiencing more pronounced cost of living pressures than others.

A separate living cost index, released by the ABS last week, showed aged pensioners experienced higher living cost increases during the past year than other household types.

The increase in living costs for age pensioner households in the year to March was 4.9 per cent while for households reliant on paid employment the increase was only 3.8 per cent.

“Living costs for age pensioner households were particularly impacted by increases in food and non-alcoholic beverages, as grocery food items make up a higher proportion of overall expenditure for age pensioner households compared to other types of households,” the bureau said.

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