Does Australian CPI Include House Prices or Mortgage Interest?

Short answer

Australian CPI does not include the purchase price of existing homes, the value of land or mortgage interest charges.

Its Housing group does include rents, new dwellings purchased by owner-occupiers excluding land, major renovations, property rates and charges, repairs and maintenance, and utilities.

This is why an increase in CPI, an increase in house prices and an increase in mortgage repayments can be three different numbers.

Use the Inflation Scenario Calculator to test a constant annual inflation assumption. It is not a historical CPI lookup, a property price forecast or a mortgage repayment tool.

What the CPI Housing group includes

The Australian Bureau of Statistics uses CPI as a broad measure of price change for goods and services purchased by households.

For housing, the CPI includes:

The new dwelling measure is not a national house price index. It is designed to capture the price of the new dwelling structure, including building materials, labour and builder margins. Land is excluded.

What CPI excludes

Australian CPI excludes:

• existing dwelling purchase prices;
• land values;
• mortgage interest charges; and
• investor property purchases as investment expenditure.

Existing dwellings are generally traded between households. For the household sector as a whole, one household buys while another sells, so the transaction is outside the CPI consumption basket.

Land is treated as an investment asset rather than a consumed good or service.

Why mortgage interest is not in CPI

The ABS excludes mortgage interest from CPI because CPI is used as an inflation measure, including for monetary policy.

If mortgage interest were included, a cash rate increase intended to reduce inflation would directly lift measured CPI through higher interest charges. That circular effect would make CPI less suitable as the main inflation target measure.

Mortgage interest charges are included in the ABS Selected Living Cost Indexes. Those indexes are designed to show changes in out-of-pocket living costs for selected household types.

For a repayment scenario, use the Mortgage Repayment Calculator. For official changes in living costs by household type, use the current ABS Selected Living Cost Indexes.

CPI, house prices and repayments answer different questions

No one number answers all five questions.

Worked example

Assume that over one period:

• headline CPI rises 4%;
• an existing home's market price rises 5%; and
• a household's mortgage rate rises from 6.20% to 6.45%.

These figures should not be combined as though they measure the same cost.

For a $600,000 principal-and-interest loan over 25 years, the indicative monthly repayment is about $3,939 at 6.20% and $4,033 at 6.45%. That is an increase of about $93 a month, before fees.

The mortgage repayment change comes from the loan balance, rate, term and repayment type. It is not calculated by applying the 4% CPI figure.

The 5% movement in the existing home's value is also outside CPI. It may affect equity or refinancing decisions, but it is not a consumer-price result and is not a valuation for another property.

Common mistakes

Applying CPI to estimate a home's value

CPI is not a property valuation index. Property values respond to location, land, dwelling condition, credit, income, supply and buyer demand.

Treating the Housing group as a house price series

The Housing group includes rents, new dwelling structures and several running costs. It excludes existing home prices and land.

Using headline CPI to estimate a mortgage repayment

Mortgage repayments depend on the loan terms. Use the actual loan rate and balance, then test a higher-rate scenario.

Calling the CPI a personal cost-of-living result

CPI describes a broad household basket. A household's own spending pattern may differ. The Selected Living Cost Indexes are closer to out-of-pocket cost changes for selected household types, but they are still group-level measures.

How to use the inflation calculator safely

The Inflation Scenario Calculator compounds one annual rate for the number of years entered.

For example, $20,000 compounded at a constant 3% for five years produces a future equivalent cost of about $23,185.

That result means: if the selected amount increased by exactly 3% every year, this is the modelled future equivalent. It does not mean:

• ABS CPI will be 3% each year;
• a property will rise by 3% each year;
• a mortgage rate will move by 3%; or
• the household's actual spending will follow the same path.

Read the inflation and purchasing power guide for the compound formula and historical CPI limitations.

Sources

• Australian Bureau of Statistics: Housing in the CPI and Selected Living Cost Indexes, checked 29 July 2026.
• Australian Bureau of Statistics: Measuring owner-occupied housing in the CPI, released 30 October 2024 and checked 29 July 2026.
• Reserve Bank of Australia: Inflation and its measurement, checked 29 July 2026.

General information disclaimer

This guide provides general information only. It is not financial advice, lending advice, tax advice, a property valuation or a forecast. CPI, living-cost indexes, property prices and mortgage repayments measure different things. Check the latest official series and use the assumptions relevant to the question being tested.

Last updated: 29 July 2026.