RBA upgrades Domestic Economic Growth

Dr AndrewWashington Green Property

Hi Everyone,

Here are some articles of interest to anyone looking at investments in Australia.

As an aside I’ve included a snippet from Tim Farrelly who emphasizes that “ Buy high, sell low still seems to be the preferred strategy for many financial advisors “ and I think this is also true for many investors. That’s why we always continue to stress that it is important to invest in quality assets, preferably when they are under-priced to comparable investments. When looking at this in the context of property investments in Australia, the best avenue to use this basic principle is to compare what is happening in different locations.

Australia’s central bank signalled the end of a two-year easing cycle and foreshadowed stronger economic growth, sending the nation’s currency higher.

Governor Glenn Stevens kept the overnight cash-rate target at 2.5 percent, saying in a statement in Sydney “the most prudent course is likely to be a period of stability in interest rates.” He said the Australian dollar’s decline “will assist in achieving balanced growth,” dropping references in past statements that it was “uncomfortably high.”

The RBA is trying to stimulate housing construction to pick up some of the slack in the labour market from waning mining investment, and has previously said that higher property prices are needed to spur the building industry.

“Credit growth remains low overall but is picking up gradually for households,” the RBA said today. “Dwelling prices have increased further over the past several months.”

A private RP Data-Rismark home value index released this week showed house and apartment prices rose 9.8 percent in major cities in the year to Jan. 31. In and around Sydney, prices in some suburbs have surged as much as 27 percent in the past year.

Read the full story at http://www.bloomberg.com/news/2014-02-03/rba-holds-key-rate-at-record-low-2-5-as-currency-pressure-eases.html

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