Australia’s CPI  data is too late!

Australia’s CPI data is too late!

.
In a recent edition of Virtual Realty News I referred to an article which appeared in Property Observer – Monthly inflation measure would have seen earlier rate cut: Paul Bloxham. The introduction of a monthly inflation measure “as used by almost all other OECD countries” would have seen a cautious Reserve Bank of Australia (RBA) cut this month (last meeting) says a former RBA economist and current HSBC chief economist for Australia, Paul Bloxham. Suffice to say nearly every OECD country works from monthly CPI data and Australia works from quarterly data where the March quarter CPI is determined at the May 1, RBA board meeting. How backward is that?

Coincidently, in the week before the April RBA board meeting, I argued that the cash rate should immediately be reduced by 0.50 basis points. One month later we read interest rates to fall – and keep falling on the back of CPI climbed by 0.1 percent for the March quarter. So for the year to March, CPI is at 1.6 percent which happens to be well below the RBA’s target band rate of between 2.00 and 3.00 per cent. To further highlight this embarrassing collection of CPI data, RBA ‘head teller’ Glenn Stevens announced after the March RBA board meeting that if the March quarter inflation numbers were benign, the bank would be inclined to cut official interest rates. Now, two meetings after the end of the March quarter, the RBA will cut the cash rate in May?

Why, does the RBA not insist on best practice by demanding monthly inflation data? Alan Kohler wrote inProperty Observer –  The RBA has egg on its face and needs to cut rates by 50 basis points.” The RBA’s economics department had a bad year in 2011, and as a result the board is now high and dry with an official cash rate that is obviously wrong. It needs to come down by 0.50 percent, to 3.75 percent, next week.”  Embarrassing? You bet! Is the RBA operating system Windows 95?

 

BUY PRINT

There is no denying that the real estate industry has been on Struggle Street so it came as little surprise to read Mark Bouris and John Symond slam Treasurer Wayne Swan for allowing major banks to dominate mortgage market. These non – bank pioneers attacked the treasurer for hindering competition by allowing the major banks to increase their dominance of the home lending markets. I must admit I was most surprised when I observed this graph, which identifies our major banks controlling 92.5 percent of the home loan market although the Building Societies and Non – Banks control just 7.5 percent. I’m unsure of the norm however; I would think that in a fair market it is strange that the major banks market share has jumped from around 80 percent to over 90 percent since the onset of the GFC. Yet the “World’s Greatest Treasurer” Wayne Swan keeps harping on television that mortgage owners should shop around.

 

Now for my conspiracy theory: No, NSW you can’t have more GST cash where the NSW proposal that the GST allocation should be allocated based on population would have delivered $750 million to state coffers.Property tax intake hits record highs despite housing slump with property related taxes rose 4.6 percent last financial year to a massive $33 billion, despite a slump in the residential housing market. A probable answer number of foreign investment residential approvals more than doubles as government scrutinises more transactions.

We have an anomaly here, given the Foreign Investment Revenue Review Board (FIRB) Annual Report 2010 – 11, “As of 24 April 2010, temporary residents residing in Australia are no longer exempted from notification of proposed acquisitions of established residential real estate. “ The FIRB now requires that in 2010 – 11, temporary residents must apply to the FIRB so that records can be kept. This means that acquisitions by temporary residents from 2008 to 2010, will never be known – or recorded!

    MOSMAN – 2088

    • Number of houses on the market last week– 101
    • Number of houses on the market this week – 106
    • Number of apartments on the market last week – 103
    • Number of apartments on the market this week – 100

    CREMORNE – 2090

    • Number of houses on the market last week– 11
    • Number of houses on the market this week – 13
    • Number of apartments on the market last week – 32
    • Number of apartments on the market this week – 34

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 12
    • Number of houses on the market this week – 14
    • Number of apartments on the market last week – 59
    • Number of apartments on the market this week – 61

Source: Domain Property Monitors

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate
• Click Here


For this week’s open for inspections –
• Click Here

Property listings remain in a holding pattern (as we predicted) and we expect to remain the status quo all the way through to spring /summer. Should this happen and we can’t see any reason why it won’t the spring/summer real estate market could very well have plenty of heat in it.

.
I will leave the federal politics out this week except to say that the ALP will be absolutely smashed at the next federal election (which may happen this year). The Independents are finally jockeying for voter approvals – so don’t be surprised if the budget is voted down in the House of Representatives.

Cheers ^__^


 

2 Responses to “Australia’s CPI data is too late!”

  • Ann says:

    Good comments on the RBA. I would be keen to know the status of the Federal Police investigation into the Reserve Banks’s note printing compaby subsidiary and the two year delay between the Board knowing of the alleged fraud and not informing the Federal Police. I would be further keen to understand why none of the RBA Board were stood down pending the Federal Police investigation.

  • Ann says:

    I had to laugh with Gillard’s urgent Sunday press announcement today.

    She returns to Australia on Friday night, goes to watch her AFL team beat Greater Western Sydney yesterday and apparently was all overcome for concern by Australians regarding Thomson and Slipper.

    She must think we are ignorant?

Leave a Reply

Your email address will not be published. Required fields are marked *