Tame inflation figures have helped fuel expectations the Reserve Bank of Australia will keep interest rates low. Commsec says the figures show inflation is not a threat to the economy, meaning the central bank can comfortably keep interest rates at exceptionally low levels over the near term. The Australian Bureau of Statistics’ Consumer Price Index rose 0.6 per cent in the March quarter, against expectations for a rise of 0.8 per cent. The annual inflation rate of 2.9 per cent came against expectations for a rise of more than 3 per cent but within the Reserve Bank’s target range.
UBS Interest rate outlook 2014
UBS Investment Bank, Chief Economist Australasia, Scott Haslem shares his outlook for Australia’s interest rates this year: “We think the RBA [Reserve Bank of Australia] is going to be on hold this year and start to move some of the very stimulatory policy in early 2015. Now, whilst that is the consensus, or the median, it is actually a non-consensus view. In the sense that about 30 per cent of forecasters think the RBA is going to cut the cash rate again in the next six months and another 40 per cent of forecasters think the RBA is going to hike rates by the end of the year.
So, we’re sitting in the middle ground that the RBA is going to remain on hold. Because ultimately, we think that the RBA is going to be balancing the very clear turnaround we’re seeing in housing and improvement in consumer, so the interest sensitive parts of our economy with the big macro forces, that are mostly negative, that are hitting out economy.
So, as we’ve talked about earlier, falling commodity prices, a slower China, less intensive commodity demand globally, the end of the mining CAPEX boom, an Australian dollar that is probably higher that the economy needs. If you balance those things, we think the RBA will remain on hold this year.”
Australian auction results
Following a record breaking run ahead of Easter property sellers headed on a four-day holiday over the weekend. Just one week earlier Sydney posted its largest auction day on record after 10 straight weeks with a clearance rate on or above 80 per cent. However, consecutive Easter and ANZAC day extended public holidays put a cap on auction listings last week:.
Sydney recorded a 74 per cent clearance rate from 41 properties for auction
Melbourne posted a 50 per cent clearance rate from 8 properties for auction
Brisbane booked a 100 per cent clearance rate from 13 properties for auction
Adelaide saw a 100 per cent clearance rate from 3 properties for auction
Commercial property sector
Property developer Mirvac Group
(ASX:MGR) has sold a 50 per cent interest in a Melbourne office building development to the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF).
Real estate investment trust Charter Hall Retail REIT
(ASX:CQR) will spend $59.2 million buy Coomera City Centre in 20 kilometres north of the Gold Coast in Queensland.
CFS Retail Property Trust Group
(ASX:CFX) has welcomed the opening of its Emporium shopping centre in Melbourne’s CBD which it says is now fully leased.
Data analytics company Veda Group Limited
(ASX:VED) has reported demand for business credit has firmed on the back of 18 per cent growth in commercial mortgages.
