I recently caught up with News24 (formerly Sky News) to discuss my reaction to the latest RBA interest rate rise and what seems being a continous streak of negative policy announcements.
As I explained, those who are making policy may have good intentions but the execution this year has been very poor. We need more business, less beurocracy in Canberra.
That is playing out in the polls, with the upcoming Victorian election being an important indicator of what will come next.
I explained that real estate like many other asset classes always moves in cycles and I’m actually optimistic because even though rates have risen, inflation last month was up only 0.2% on a trimmed mean basis on the prior month, which suggests it is moderating.
Once the conflict in the Middle East settles (it always does) and rates start to constrain spending, the RBA will start to worry about growth and start changing its tone.
Meanwhile, residential construction costs remain high and new supply is very tight…supporting prices.
