Why November?

Most people seemed taken by surprise, when the RBA chose to raise the cash rate to 4.75% on Cup Day this week.

However, with Oaks Day being held yesterday, I thought today would be better timing for this post.

Price Pressures

Price Pressures

Sure, the September quarter CPI had fallen to within the RBA’s target range. And yes, there is still some uncertainty overseas.

However, with industry facing capacity constraints and the mining boom heading towards previous levels … inflation is poised to accelerate during the December quarter, as wages start to rise.
[Read more…]

Retail Returns to Favour

Retail property has had some press coverage of late.

It has shown a surprising improvement, given global events and the hike in interest rates.

Westfield (a good retail barometer) reported a strong mid-year result from its Australian shopping centres.

RetailMar2010As you can see from the table, Vacancy rates have fallen significantly and Yields firmed — particularly within the strip shopping centres of Melbourne.

And furthermore, rentals have also started to climb … as the economic recovery has given shoppers confidence to start spending again.

Currently yields ranging between 4% and 6.5% across these various strip centres. And would indicate that investors are returning to retail property once more.

If you are planning to acquire some Retail property, you need …

    1. A strong tenant (well-established, or proven backing);
    2. A long lease (5 years+); and also
    3. Solid rental reviews (CPI or at least 3.75% pa).

With these in place, you should be able enjoy a good long-term investment.