Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Budget Gives Timely Health Check-Up; Economy's Vital Signs Showing There Is Plenty of Life

Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Budget Gives Timely Health Check-Up; Economy's Vital Signs Showing There Is Plenty of Life

Article excerpt

Byline: Sue Custance and Erle Levey

QUEENSLAND can expect a solid economy for the remainder of 2017 with interest rates to remain on hold for the medium term.

Leading economist and finance commentator Tom Piotrowski has predicted interest rates to remain on hold for the medium term.

At his keynote presentation at the REIQ Aon Real Estate Luncheon at Victoria Park Golf Club, Mr Piotrowski said the twin factors of lower than expected inflation and weak wages growth were the influences behind the RBA's decision to leave rates on hold this month.

"Locally anchored inflation outcomes, coupled with weak wage growth means that the RBA is firmly on hold with domestic interest rates for the medium term," he said.

He also said that while the regional economy was undergoing "a range of conditions" the overall outlook for the Queensland economy was good.

"Spending and retail trade have both accelerated in recent times, after household spending picked up significantly in the second half of last year.

"Household spending growth in Queensland is likely to remain firm over the remainder of 2017.''

REIQ CEO Antonia Mercorella said while Queensland's housing market was holding its own, growing around 3.5% to 4% a year in recent years, the good news on the economy was welcome.

"Our growth is steady and sustainable, but the factors under-pinning our economy are fragile. An uptick in wages growth, employment numbers, and population growth would provide stronger scaffolding for the property market," she said.

Mr Piotrowski said Australia has a strong, robust economy and was "the corner store/hardware store for Asia.''

It is vital for government decision-makers to understand the value of the property market, Mr Piotrowski said.

"Effectively, what we are talking about is banks have an exposure to the property market and it is not a market that has similar characteristics across the spectrum. …

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