The Real Cost of Living in Australia

What is CPI?

• CPI stands for Consumer Price Index.
• It tracks changes in the average price of a basket of essential goods and services.
• Common items: food, housing, fuel, health, and education.
• It’s used to measure inflation and changes in the cost of living.

CPI Annual Change Trend (2016–2025)

• Annual CPI shows low inflation pre-2020.
• Sharp drop in 2020 (COVID impact).
• Rapid rise from 2021–2023, peaking at 7.8%.
• Begins to stabilise in 2024–2025.

## Which Grocery Items Got Expensive?

• Not all food items experienced the same inflation.
• Bread & cereal products peaked at 7.2% in Jun-24.
• Fruit & vegetables surged to 8.5% in Sep-24.
• Even staples like dairy and beverages remained high.
• This highlights the uneven pressure on households.

## Rent Inflation by Capital City

• Perth tops the chart with an 8.9% rent increase.
• Brisbane, Adelaide, and Melbourne also recorded significant hikes (5.5–5.8%).
• Hobart is the only city with a decline in rent (-1.3%).
• Regional differences highlight uneven housing cost pressures across Australia.

## The Rising Cost of Education

• Education fees have increased significantly post COVID.
• Secondary education jumped by +6.4% in March 2025.
• Tertiary spikes in 2023 (+9.7%) reflect fee indexation changes.
• Education CPI is only published in March, but shows consistent annual pressure.

## Cost-of-Living Pressures: Are We Better Off in 2025?

• While the overall CPI has dropped significantly from 7.0% to 3.4%, essential categories like rent and groceries remain elevated.
• Rent increased from 4.9% to 5.5%, making it the most stubborn cost pressure.
• Education eased slightly from 5.9% to 5.2%, but remains high.
• Grocery inflation dipped from 4.1% to 3.7%, showing signs of relief but still above the CPI headline.
• These trends highlight how essentials are not easing as fast as the national average.

## What the Data Tells Us About the Cost of Living

• The overall CPI trend is declining, but not all categories are easing equally.
• Rent and education costs continue to rise, disproportionately affecting lower-income households.
• Grocery prices remain volatile, making budgeting difficult for many.
• The data shows that while inflation is stabilising, the lived reality for essentials is still tough.
• Policymakers and support systems need to consider category-specific pressure, not just overall CPI trends.
• Future work could explore income-level impacts or regional differences to better inform targeted support policies.

References

Australian Bureau of Statistics. (2025). Consumer Price Index, Australia, March 2025 [Data set]. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release#data-downloads