RBA Reprieve …
But don’t be Fooled

The RBA appears to be performing a rather fine balancing act.

Key factors affecting the RBA's future decisionsIts Board knows rising inflation is about to emerge. And this is only temporarily masked by a poor March quarter, following the nation’s flooding earlier in the year.

Recent overseas events provided a plausible backdrop for Tuesday’s decision to keep interest rates on hold. However, Australia’s GDP will have surged back during the June quarter — to make a further rate rise in July/August almost inevitable.

These graphs show an upward trend in three key factors. And you only need to observe the growing number of strikes by unions, to realise we are about to experience a huge leap in wages all around Australia.

Bottom Line: Despite the strong April figures, you should still be wary of Retail property. Also, be selective in acquiring only well-located Industrial property. And focus your attention mainly upon suburban Offices.

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