THE GENERAL consensus seems to be that the RBA will further reduce rates by 25 basis points. But can this view be fully justified; and what does all this mean for Commercial property investors?
Most pundits would point to the recent CPI figures and say “Yes”! And on the surface, an underlying inflation rate of 2.5% per annum is plumb in the middle of the RBA’s stated target zone.
Yet despite what seems to be a rather hesitant mood by consumers, inflation in the service sector actually surged by massive 4.4% per annum. And some other sectors (not affected by overseas competition) also finished the year strongly, growing by 3.9% per annum. [Read more…]
The banks seemed to be protesting about the increased cost of offshore borrowing. And using that as their excuse for not wanting to pass on any future RBA rate reductions in full.
But once you understand that Commercial property and Residential property completely different, you then begin to understand how the commercial market actually works.
In China, the economy grew at 9% over the year. And while many commentators talk about the risks to growth in China, I have been there regularly this year and I am confident about the ability of the Chinese government to manage inflationary pressures and managed the shift from export-led growth, to growth based on more internal demand. 
Those experts included … Greg Marr (MD of DTZ), Tony Crabb (Research Head of Savills), together with me (as CEO of Properly Edge Australia).
