Prices are a-falling: prices of PC’s, AV technology fell a whopping 6.3% this year, new ABS stats show.
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|Prices for tech goodies like tablets are now cheaper than ever.|
This massive drop in tech prices defied the slight overall 0.1% rise in consumer prices in the first three months of the year, revealed by the ABS Consumer Price Index (CPI) today.
This slight inflationary rise compared with no change in the December quarter 2011, according to Australia Bureau Statistics.
However, the headline CPI is now 1.6% through the year to March, compared with a 3.1% rise last quarter, meaning an interest rate rise could be on the cards for the Reserve Bank next week.
The most significant price falls were for fruit, which fell a whopping 30% after last year floods pushed prices sky high, followed by ‘audio, visual and computing equipment’ which slumped a massive 6.3%,
Price deflation is something which major retailers including Harvey Norman and Dick Smith have been crying about for some time now, on the back of online competiton pushing prices downwards.
The ABS’ computer price index measures the price change of the same PC from month to month. “Any difference in price observed between one PC model and another is treated as a quality change as computing power and features improve over time,” according to the Index.
However, since it has become clear Aussies have been overcharged for IT and tech goods for years, this price deflation means we may eventually align with the average prices the rest of the developed world pays.
Telsyte analyst Sam Yip says Aussies are being overcharged on technology across the board.
“Generally, the sentiment is that Australians are overcharged on everything from software right through to hardware,” he told SmartHouse.
Read: How OZ Gets Screwed On IT Prices
Resellers and developers are being “opportunistic” as they realise Aussies will pay higher prices, despite the cost of delivery of digital product being similar around the globe.
But not for much longer – Yip predicts prices of technology will fall over the next 24 months, saying the price drop will be a “natural progression” for retailers in a bid to stay competitive in an online world full of bargain hungry consumers.
Discount sites popping up online are driving this price deflation, he added, saying recent research on 18 categories of goods sold online indicated discounts were introduced in all categories examined.
However, the price discrepancies “will be milked for what its worth for the time being,” Yip warns.
And just yesterday, SmartHouse reported on the exorbitant cost of IT software compared to US and UK with Labor MP Ed Husic calling on the government to investigate why Aussies are getting screwed over on software RRPs, claiming we are charged up to 80% more than US or UK consumers.
International travel and accommodation (-4.8%), furniture (-6.0%), and domestic holiday (-2.0%) all fell in price this year.
However, the major price rises included: pharmaceutical products (+14.1%), secondary education (+7.7%), automotive fuel (+2.5%), medical and hospital services (+2.1%), tertiary education (+4.7%) and rent (+1%).