Year-end Recap, on Where Things Stand!

During October, business borrowing actually expanded by a healthy 1.1 per cent — to be 13.2 per cent for the 12-month period.

However, business debt and credit cards are considered more risky than home loans. Therefore, banks will raise their risk premium in these two areas; and not lower those lending rates, as much as the RBA’s official rate cuts.
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This is Not Quite the Stuff of Fairytales …

But for the most of 2008, Australia has basically experienced what you might term a Goldilocks market for Commercial property … “not too hot, and not too cold!

Despite Office, Retail and Industrial being near the top of their cycles … the global turmoil has prevented the usual runaway activity occurring — in most capital Cities.

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Recognise the Investment Opportunities …

Anecdotal evidence suggests that consumers are cutting back on their spending around Australia. And it’s likely that luxury items and overseas travel will be the most affected.

The Flight to ValueA recent article in The Age expounded “The Flight to Value” — where Australian Property Monitors reported a 24% drop in the median price for Toorak Homes, in the 6 months to September.
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How You Can Capture a Strategic Advantage

With the recent financial turmoil, you’re seeing a number of potential buyers who have pulled back from the Commercial Property Market for the time being.

Therefore, for some properties, you are starting to see the “Neglect Effect” come into play.
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Melbourne Offices: Alive and Well

Even though things may be slowing in Queensland and over in the West … the Melbourne CBD Office market seems to be travelling quite well.
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Some Answers in These Troubled Times

There are a couple of questions on the minds of Commercial Property Investors at the moment.

And they go something like this.
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Will there be an Office Market Collapse?

According to the recent Property Council (PCA) report in the Financial Review (AFR) … the 6 months to June saw overall demand for offices fall around Australia — as business confidence has gradually waned throughout the world.
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The State of Play!

Soft LandingThe various signals coming through on the economy are mixed. And we continue to hear more doom and gloom from the US.

Australia’s growth is likely to slow a little. However, on balance, we should now experience a soft landing — with the RBA saying this morning, that the rate rises may have done their job; and inflation looked as though it might have peaked.
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Household Debt Addiction

In several previous postings, you’ll recall that I have raised the issue of Australia’s current blowout in household debt.

A recent article in the weekend Financial Review (pages 26-27) highlighted the current state of affairs.
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Retail — Where to from Here?

The Prime Minister’s “freezing” of parliamentary salaries is a clear endorsement of RBA Governor Stevens’ warning to curb our spending.

Last week, I mentioned the impact this could have on retail turnover — with a flow-on effect for growth in rental and sale prices for the Retail sector.
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The Effect of the Rate Rise?

Yesterday’s interest rate increase by The Reserve Bank carries with it some hardship for the outer residential suburbs around Australia.

p=. CPI Figures

Curbing inflation is clearly the RBA’s main aim. And from their additional comments yesterday, we now have confirmation that Australia is effectively seen as being shielded from the turmoil in the US.
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