House prices likely to be steady in Sydney and Melbourne, report
Housing PMI (SYDNEY)
A new residential property report says rising interest rates are
likely to keep real estate prices steady in Sydney, Melbourne,
Adelaide and Canberra over the next year.
But the report, by PMI Mortgage Insurance, says prices are
likely to increase in Perth, Brisbane and Darwin.
The March 2005 report forecasts further rises in interest rates
during 2006, resulting in modest price declines across most capital
city markets for 2006 and 2007.
Economists expect the Reserve Bank of Australia to increase
interest rates by April, after pushing up the overnight rate by
0.25 per cent to 5.50 per cent in March.
AAP RTV rh/jcc/lmc/ea22-03-05 1440
Interesting that PMI are forecasting significant interest rate rises in 2006.
Apparently so is Alex Erskine
The RBA will soon have to come clean on just how bad the inflation outlook really is. This will be a matter of shame for the RBA – imagine overshootig next years’s target (a range of 2-3%) not just by 0.25% (which has been admitted) but by a monstrous 5% inflation rate. 5% is a conservative outcome of a continued rise in wages of 4%, a collapse in productivity growth to zero and a move to a weaker – more export-friendly and import-repellent – exchange rate of say US$0.70. What will interest rates have to rise to then, dear Alan?I guess property investors just have to hope the government resists pressure to abolish negative gearing
But scrapping negative gearing and the first home owners grant is gaining traction among policy thinkers. The Reserve Bank of Australia chief Ian Macfarlane recently called for a review of negative gearing.
Leading think-tank, The Centre for Independent Studies, also blames the Federal Government’s generous tax breaks on housing for causing a blowout in prices and affordability.Cheers, F.[cowboy2]
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