The real CPI
Official CPI says inflation is cooling. Only 1 in 6 Australians believe it.
For as long as the RBA has targeted inflation, CPI has been treated as a shared number. One figure, one experience, applied evenly across the country.
That assumption doesn't survive contact with the people it's meant to describe.
New research from Airteam and Primara Research, surveying 1,000 Australians, finds that just 1 in 6 believe official CPI reflects their actual cost of living. 73% say their personal costs have risen faster than the headline figure suggests. To find out why, Airteam and Primara Research rebuilt CPI into four measures split by housing tenure, and the gap official data misses came into focus immediately.
The number was never wrong by accident. It was never built to capture this.
One figure, four realities
CPI tracks a basket of prices. It was never designed to track what a household actually carries. Split by tenure, the difference is stark:
- Mortgage holders: 152.8 index, a 29.5% increase over four years
- New home builders: 149.3 index, a 23.7% increase
- Outright owners: 142.0 index, a 17.4% increase
- Renters: 140.6 index, an 18.4% increase
- Official CPI: 143.91 index, an 18.6% increase
Official CPI sits almost exactly between the extremes it's meant to represent. That's the problem, not the reassurance. It means the figure is wrong for nearly everyone, just in different directions.
“A mortgage holder and a renter might shop at the same supermarket and pay the same petrol prices, but their overall cost of living is fundamentally different,” says Rich Atkinson, CEO of Airteam. “Our mortgage holder index sits at 152.8, a full 10.8 percentage points above renters. That's a completely different economic reality that demands tailored measurement.”
What the rate rises actually did
The gap isn't theoretical. It shows up hardest at the exact moment monetary policy is supposed to be working.
During the rate-rise cycle from June 2022, when the cash rate climbed 3.5% in eighteen months:
- Mortgage holder index: an 84% spike in housing costs
- Official CPI: a 6% rise over the same period
A fourteen-fold gap between what the RBA's own instrument moved and what mortgage holders actually experienced isn't a rounding error. It's a measurement built for a household that mostly doesn't exist.
The tool only reaches 4 in 10 households
Rate rises are meant to cool aggregate demand. They only touch demand where there's a mortgage attached to it.
- 39.5% of respondents hold a mortgage.
- 60% of households, outright owners and renters, carry none of these housing costs directly.
That same 60% often see purchasing power rise as wages and savings returns adjust upward, even as rates climb.
To achieve the same dampening effect on the whole economy, the burden on that smaller group has to be more than double what it would need to be if everyone were exposed equally. The policy lever isn't blunt. It's aimed.
“Mortgage holders are already the most stretched group when it comes to housing affordability, and now they're the only ones absorbing the cost when rates rise to fight inflation,” Atkinson says.
The people paying it are the youngest in the room
Mortgage exposure isn't spread evenly across generations either.
- Millennials: 54% hold a mortgage
- Gen X: 43% hold a mortgage
- Boomers: just 16% hold a mortgage
When rates rise, the majority of the wealthiest generation by accumulated assets gain purchasing power. The generation still paying off their first homes absorbs the full weight of demand they didn't create.
“These tailored measures expose a critical contradiction in how monetary policy actually works,” says Peter Drennan, Head of Research and Data at Primara. “When rates rise, mortgage holders see costs skyrocket by amounts official CPI doesn't capture. Meanwhile renters and outright owners, two-thirds of households, effectively see real income rise. That purchasing power can fuel the very discretionary inflation rate rises are meant to cool.”
The people it's supposed to help think it's making things worse
Ask the households living this, and the verdict isn't ambiguous.
- 72% of all respondents agree raising rates makes the cost of living worse, not better.
- 80% of mortgage holders specifically agree.
The mechanism the RBA relies on to fight inflation is one the clear majority of those surveyed have already identified as counterproductive. That isn't a fringe grievance. It's close to consensus.
A better number, not a finished one
These four measures aren't offered as a replacement for CPI, and they don't explain everything. Even renters and outright owners, whose tenure-based costs are flat or falling in this model, report costs rising faster than the official figure suggests, a signal that the broader basket, and how it's weighted against how Australians actually spend, may itself be lagging reality.
What the data does settle is narrower and harder to dismiss: housing tenure changes the experience of inflation so completely that a single national figure can no longer describe it. The RBA's tool for cooling the economy is being paid for by well under half the households in it, disproportionately the youngest and least wealthy among them.
Measuring cost of living the way Australians actually experience it is the first step. Policy that spreads the burden of fighting inflation across the households actually driving it is the harder one still to come.
About the data
Analysis for this release was completed by Primara Research for Airteam. The data used in this release is from ABS and RBA data on inflation, property prices, interest rates, and the Census. The research also uses a survey of 1,000 Australians conducted in June 2026.
Survey Results
Question: Compared to the official inflation figure reported in the news, how do you think your own cost of living has changed over the past four years?
Results by generation:
Results by gender:
Results by state:
Question: Do you currently have a mortgage?
Results by generation:
Results by gender:
Results by state:
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