In Papua New Guinea, two important economic concepts—Consumer Price Index (CPI) and inflation—affect the cost of living and real estate prices. CPI measures the average change in prices for a basket of everyday goods and services, like food and housing. For example, if the CPI increases from 100 to 105, it means prices have risen by 5%. This impacts how much you pay for groceries or rent. Inflation, on the other hand, is the rate at which prices rise, reducing the purchasing power of your money. If inflation is at 5%, what you could buy for K1,000 last year will cost K1,050 this year. In PNG, inflation is influenced by factors like the cost of imported goods and global oil prices. As inflation rises, property prices also tend to increase, making real estate more expensive. Additionally, higher inflation means that potential homebuyers may struggle to afford properties, as their money buys less than before. Understanding CPI and inflation is crucial for navigating the rising costs of living and making informed financial decisions.