Inflation, Growth and Commercial Property

You need to Look Behind the Official Inflation figuresTHE LABOR government is crowing about its latest statistical achievements — low inflation, low unemployment, strong growth and booming investment.

So, why aren’t Australians feeling an overwhelming sense of warmth and well-being? Probably, as my earlier articles have explained … it all comes down to an overall lack of confidence.

Most people are still expecting the RBA to further reduce interest rates. However, barring a European meltdown, that would seem to be rather unlikely in the foreseeable future.

You only need to study these graphs to understand the RBA’s hesitancy — because clearly, the average measures of inflation currently sit at the bottom of the target band adopted by the Reserve Bank. [Read more…]

Australia, the Global Economy and Commercial Property

GERRY HARVEY appeared to sum it up fairly well in a recent interview:
“It was unusual to have such a poor sentiment at a time when Australia’s economy was relatively strong compared to America and some countries in Europe.”

Overseas Property Investors are currently very active Harvey feels Australia has an economy regarded as strong by outsiders. And yet there is a total lack of confidence, and businesses are therefore suffering.

Overseas investors are actively targeting Australian Commercial Property — accounting for around half of all sales of over $30 million. Whereas, local investors remain hesitant. [Read more…]

Retailing Set to Rebound in 2013

THE FIRST half of 2012 has been rather dismal for retailers. Figures coming out of the ABS tend to confirm anecdotal evidence that retailing is doing it tough.

And none more so than department stores, fashion and electronics. Whereas, food and entertainment remain the only bright spots. [Read more…]

Commercial Property Attracting Overseas Buyers

Melbourne Ofices in hot demand by overseas investorsACCORDING to a recent report by Property Watch, overseas investors appear to be strongly buying Office buildings, within Docklands and the CBD of Melbourne.

Currently, these Office purchases account for around 36% of all very major deals being transacted — and they seem to be driven by Melbourne having the 2nd lowest vacancy rate, after Perth. [Read more…]

How Will the RBA’s Decision Affect Commercial Property?

NOT EVERYONE was expecting the RBA to further ease the cash rate, when its Board met this week.

Some felt the Board would simply “keep its power dry”, and just wait to see how the outcome of the 17 June election in Greece unfolded.

Some economists like Saul Eslake (of Merrill Lynch) felt that the $2.5 billion of cash payments by way of government compensation for the carbon tax, would serve as “enough stimulus” for now.

But maybe, such thinking took too simplistic a view of things. [Read more…]

Time for Some Contrary Thinking with Your Commercial Property Investing

View the current Opportunity for what it is.AMIDST ALL the recent doom and gloom, major global banks are quietly alerting their clients to prepare for a sharemarket surge, if Greece exits the Euro-zone.

That’s because they believe world authorities will be flooding international markets with massive liquidity.

And given the G8 Communique from Camp David, this may well occur anyway — just to keep Greece within the fold. [Read more…]

City Office Markets Starting To Reclaim Their Pre-GFC Values

Office Values heading back to pre-GFC LevelsIT HAS TAKEN almost 4 years … but 2012 should see the prime Office markets in Perth, Melbourne and Adelaide expunge the capital value lost through the GFC — according to CBRE research.

In turn, this will impact upon their suburban Office markets as well.

But it might take until 2016 before Sydney, Brisbane and Canberra are able to recoup that same lost ground. [Read more…]

Where To Now, For Interest Rates?

Key Components are distorting the CPITHE RBA Board’s big 0.5% cut in the cash rate surprised many people. While others were wondering … what took them so long?

You could certainly be forgiven for thinking that the trigger for this latest cut lay in the underlying inflation (at 2.2% pa) now being “under control”.

And also, that the RBA was seeking to lower the Australian dollar to assist manufacturers and exporters. [Read more…]

Your Timing Within The Commercial Property Cycle

The traditional Investment Clock for SharesIF YOU have invested in the share market, you would most likely be familiar with the so-called “Investment Clock” — which attempts to show how the economic cycle influences equities.

In essence, an over-heated economy is followed by rising interest rates and falling share prices. Then, as the economy declines interest rates start to fall and share prices rise again.

Some analysts have tried to devise a similar “clock” for Commercial property. But unfortunately, the results have generally not been useful. [Read more…]

Current Opportunities Within The Commercial Property Market

The "Emotional Cycle" suggests an upturn in activityCONTRARY TO THE VIEW of many pundits, it’s certainly not all gloom and doom out there.

The share market may well have been moving sideways within a 4000 to 5000 band, since 2009.

Plus, the two-speed economy only seems to be benefiting the miners and those within the service industries. And unfortunately, increased savings levels are frustrating the retailers no end.

However, my view remains that Australians are now poised ready to come off the bottom of the “Emotional Cycle” — armed with a level of savings seldom seen in previous upturns. [Read more…]

Commercial Property and The Current Economy

These are Better Indicators of our Economic Well-beingLAST WEEK, we explored just how the misuse of statistics by some commentators was distorting of the truth about Australia’s economic well-being, on a state-by-state basis.

So it is with several other indicators, as David Bassanese pointed out in a recent article (AFR: 22 March, page 36).

Many commentators are pushing for interest rates reductions, because the “economy is soft”. And they list … [Read more…]