Posted on Wednesday, February 2nd, 2011 in by Matt Garmony
The Reserve Bank of Australia (RBA) kept interest rates on hold at 4.75% yesterday making reference to lower than expected December inflation figures and the recent devastation caused by the Queensland floods. Economists are predicting inflationary pressure from the rebuilding of Queensland after the January floods which may trigger further interest rate rises mid year. This, coupled with a historically high number of properties currently listed for sale and extended selling periods, in our opinion, will have a negative effect on the Perth property market. However a report by REIWA president Alan Bourke yesterday indicated residential property rents are predicted to rise in the coming months, which may increase participation in the market by investors, thus potentially improving market conditions. Our outlook is for subdued market conditions in the short to medium term.