If you keep a close eye on CPI movements for rent reviews and indexation clauses, you may have noticed something unusual in the most recent release: the index numbers no longer align with previously published figures.
Before you worry that something has gone wrong with your lease calculations — don’t. The Australian Bureau of Statistics (ABS) has implemented an important update known as CPI re‑referencing, and it changes how index numbers are expressed, not the underlying movement.
Here’s a simple breakdown of what changed, why it matters, and how to correctly calculate CPI‑based rent reviews going forward.
Why the CPI Index Numbers Have Changed
In January 2026, the ABS introduced a major structural update to the Consumer Price Index (CPI) called re‑referencing. This process resets the baseline (or “index reference period”) to a new value, so that September 2025 now equals 100.00.
Previously, the reference period was 2011–12 = 100.0, so all historical index numbers have now been converted to align with the new base.
Why Did the ABS Make This Change?
According to the ABS, re‑referencing is necessary for several key reasons:
- Alignment of monthly and quarterly CPI
With Australia now publishing a complete monthly CPI series, both monthly and quarterly figures needed a consistent baseline. - Improved precision in low‑value index series
Some expenditure categories (e.g., audio‑visual and computing equipment) had index numbers falling very low due to long-term price declines. Re‑referencing boosts these numbers to avoid loss of precision. - Maintain continuity without altering inflation outcomes
The ABS emphasises that only the scale changes—the underlying movements and percentage changes remain the same. Any small differences arise only from rounding.
For commercial property owners, the most important point is:
This does not change inflation — only the index values you use in calculations.
What This Means for Commercial Leases
If your lease agreement specifies CPI‑based rent reviews, you must now use the re‑referenced indexes (where September 2025 = 100.00).
To help users transition, the ABS has issued tables converting all historical CPI numbers into the new scale. These tables ensure:
- You can still calculate CPI movements exactly as before
- Historical comparisons remain meaningful
- Only the index numbers themselves have changed — not the percentage increases
For example, the old Sydney CPI for September 2025 was 143.90, but under the new series it is now 100.00. This aligns with the ABS’s standard re‑referencing method, which applies a conversion factor to reset the index while preserving all movements.
Example: How to Apply the New Index in a Rent Review
Let’s assume you have a rent review effective 1 January 2026, requiring you to compare:
- December Quarter 2024 CPI, and
- December Quarter 2025 CPI
From the re‑referenced ABS table for Sydney:
- December 2024 = 97.57
- December 2025 = 101.19
Step‑by‑Step Calculation
Formula
New Rent = Current Rent × (New CPI ÷ Old CPI)
Workings
$100,000 × (101.19 ÷ 97.57) = $103,710.16
This equates to a 3.7% increase, which aligns with Sydney’s reported annual inflation rate for December 2025.
Key Takeaways for Commercial Property
- CPI index numbers have changed because the ABS re‑referenced the CPI to September 2025 = 100.00.
- This aligns quarterly CPI with the new monthly CPI series and improves data precision.
- Percentage movements (inflation) have not changed.
- You must use the new tables when calculating CPI‑based rent reviews.
- The method of calculation remains exactly the same — only the index values are different.