It’s not just rising interest rates that the Rudd government will have to contend with, in the run-up to the next election.
The joy of the resources boom restarting brings with it certain unwanted side effects. What you will start to see is wage rate increases; plus the drawing away of materials and equipment, from other sectors within our economy.
Furthermore, the stronger Australian dollar will bring increased hardship to our tourism and manufacturing industries — who exported goods and services internationally.
Not to mention, our local businesses … who are finding it harder and harder to compete with cheaper imports.
Clearly, Australia doesn’t want to miss out on the extraordinary growth occurring in both China and India.
However, the real test of the government will be in how it oversees the insatiable demand for labour and capital by the mining sector — while not starving the rest of the economy of these same key business imports.
With the voice of trade unions becoming louder, the temptation for Rudd is to resort to government subsidies. But sadly, it is often the most vocal (rather than the most deserving) who seemed to benefit from these type of handouts.
Maybe the preferred option would be to allow the “fittest” to survive; and thereby cause of Australia’s overall productivity to rise in the process?
But then, it is an election year!
Nonetheless, the continued stronger demand bodes well for Commercial property during 2010 and beyond.
Continue Reading
In fact, the RBA has been cautious … NOT asleep!
Last week, we covered the statistical anomaly relating to Australia’s low unemployment figure. And that may well have influenced the RBA in holding rates steady last month.
Although, the patchy spending in December and January probably coloured their thinking as well.
Nonetheless, you continue to see a […]
Continue Reading
There are some interesting outcomes emerging from a wash-up of the recent financial turmoil.
Australia has fared best among the Western countries, with its unemployment rate at only 5.3% and falling. But does this now mean you’ll start to see wage pressures emerging?
Continue Reading
Whenever you go through a major structural change within society or the economy … opportunities will always emerge.
But you’ll find that Baby Boomers won’t be retiring — well, not in the conventional sense. Most will leave their long-time employment, to establish some type of small consultancy business.
In the past, many well-known firms simply evolved as […]
Continue Reading
Last week, you hopefully gained a clearer understanding of the timing (and impact) Baby Boomers will have on Residential property, until around 2025.
Most people probably feel all this would have little or no impact on Commercial property.
And for some of you, that might be true. But I suspect there are many Boomers, where the effect […]
Continue Reading
Yesterday, the Federal government released Australia’s third Intergenerational Report.
And about five years ago, I came out with a somewhat startling statement:
“If you haven’t sold your traditional family home by 2010 … you had better be prepared to hold it until 2025 — because there simply won’t be a market for it!”
Continue Reading
While several capital cities still have a reasonably high Office vacancies, there is a general shortage of space looming.
Twelve months ago, it was all doom and gloom for the CBD Office markets in Perth and Brisbane — with falls expected in both rents and values. New projects were being finished, as the resources boom ground […]
Continue Reading
There has been much written already about the global financial crisis.
But in layman’s terms, it occurred as a result of capital imbalances occurring throughout the world. And nowhere more so, than in America.
The principal cause can be found with the high levels of US debt-funded consumption. And in order to better understand this distortion, you […]
Continue Reading
It might surprise you to hear this, however …
A Strong US Recovery
… would probably be the worst thing to happen for Australia in 2010.
If that occurs, the US Federal Reserve would be forced to quickly raise interest rates, from zero to around 3%. And that would cause the collapse in the Australian dollar from its […]
Continue Reading
By early December 2009, sales of Commercial property in Melbourne’s CBD had almost reached $1 billion — according to a report prepared by Jones Lang LaSalle.
Apparently, Melbourne office sales (for buildings over $10 million) totalled around $998 million — while in Sydney, it had reached $444 million.
Sales may well have topped the $1 billion […]
Continue Reading
I realise Christmas is almost upon us … but may I wish you and your family all the very best, at this joyful time of year.
As with past years, I have not sent out a whole host of Christmas cards.
