PROPERTY PRICES STILL RISING

7 Nov 2016

The media is still agog that house prices continue to rise. As we have been saying for the last 2 years, if you flood the economy with cash and lower interest rates, of course any scarce assets will boom. At some point Central Banks worldwide will have to admit the policies post GFC clearly have not worked. Present indications are they will go for more intervention and stimulus rather than allowing the market to adjust. There may be some short-term adjustment in apartments but really, nothing has changed in the basic drivers of the increase. The stock market, however, has still not returned to pre GFC levels. Offices are still the standout investment due to a very tight supply.