Archive for October, 2010

Inflation pressure to force RBA’s hand

Oct 26
Posted by Plan Assist Filed in Loan Finance
The RBA is widely expected to lift the official cash rate 25 basis points when it meets next Tuesday.
According to HSBC economist Paul Bloxham, the Australian economy is now back to growing at around trend, with business surveys suggesting it is operating at near capacity.
“In addition, the unemployment rate has fallen to around 5.1 per cent, which is close to most estimates of the natural rate,” Mr Bloxham said.
With this in mind, Mr Bloxham said it is likely we will see inflation increase, which would force the Board to lift rates on November 2.
“Our central forecast is for an underlying inflation rate (average of trimmed mean and weighted median) of 0.8 per cent in Q3, which we think will be a key part of the motivation for a 25 basis point rate hike – taking the cash rate to 4.75 per cent,” he said.

interest rate going upThe RBA is widely expected to lift the official cash rate 25 basis points when it meets next Tuesday.According to HSBC economist Paul Bloxham, the Australian economy is now back to growing at around trend, with business surveys suggesting it is operating at near capacity.

“In addition, the unemployment rate has fallen to around 5.1 per cent, which is close to most estimates of the natural rate,” Mr Bloxham said.With this in mind, Mr Bloxham said it is likely we will see inflation increase, which would force the Board to lift rates on November 2.

“Our central forecast is for an underlying inflation rate (average of trimmed mean and weighted median) of 0.8 per cent in Q3, which we think will be a key part of the motivation for a 25 basis point rate hike – taking the cash rate to 4.75 per cent,” he said.

(By: Staff Reporter, Inflation pressure to force RBA’s hand, Tuesday, 26 October 2010)

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House prices to climb

Oct 13
Posted by Plan Assist Filed in Latest News
House prices are expected to soar 20 per cent over the next three years, a new report has found.
According to QBE LMI’s Australian Housing Outlook report, improving economic conditions are expected to facilitate further house price growth in Sydney, Adelaide and Perth.
More moderate growth is expected in Brisbane and Hobart, where affordability is not as strained and there is no sustainable dwelling deficiency.
QBE LMI chief executive officer Ian Graham said the Australian property market gained momentum in 2009 on the back of the First Home Owner’s Grant Boost Scheme (FHOGBS) and record low interest rates.
However, the expiry of the FHOGBS at the end of 2009 and several interest rate rises between October 2009 and May 2010 effectively moderated house price growth in the first half of 2010.
“The decline in first home buyer demand in the first half of 2010 is primarily due to first home buyer activity being pulled forward into 2009 because of the FHOGBS. However, demand is forecast to return to more normal levels, believed to be around 130,000 to 140,000 loans approved, in 2011” Mr Graham said.
“Future median house price rises will be underpinned by a deficiency of dwelling stock across most capital cities, which in turn will lead to tight vacancy rates and solid rental growth, flowing through to investor demand.”

price up for houseHouse prices are expected to soar 20 per cent over the next three years, a new report has found.

According to QBE LMI’s Australian Housing Outlook report, improving economic conditions are expected to facilitate further house price growth in Sydney, Adelaide and Perth.More moderate growth is expected in Brisbane and Hobart, where affordability is not as strained and there is no sustainable dwelling deficiency.

QBE LMI chief executive officer Ian Graham said the Australian property market gained momentum in 2009 on the back of the First Home Owner’s Grant Boost Scheme (FHOGBS) and record low interest rates.

However, the expiry of the FHOGBS at the end of 2009 and several interest rate rises between October 2009 and May 2010 effectively moderated house price growth in the first half of 2010.“The decline in first home buyer demand in the first half of 2010 is primarily due to first home buyer activity being pulled forward into 2009 because of the FHOGBS. However, demand is forecast to return to more normal levels, believed to be around 130,000 to 140,000 loans approved, in 2011” Mr Graham said.

“Future median house price rises will be underpinned by a deficiency of dwelling stock across most capital cities, which in turn will lead to tight vacancy rates and solid rental growth, flowing through to investor demand.”

(Source: Staff Reporter, Wednesday, 13 October 2010)

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