Oliver’s Insights – 9 April 2015

By April 9, 2015News

Shane Oliver

Head of Investment Strategy and Chief Economist.

 BOOMING Australian residential property market & it’s implications for interest rates

The key points are as follows:

> A housing recovery has been a necessary aspect of rebalancing the economy through the mining bust.

> While Australian property prices are overvalued, this should not be a constraint on the RBA. Expect another rate cut in May with the strong possibility of more to follow.
> The medium term return outlook for Australian residential property is likely to be constrained by a combination of low rental yields and overvalued home prices.

 

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