RP Data-Rismark released their dwelling price data for April today (
here). Brisbane and Perth are leading the price slide with Sydney and Canberra showing small gains. This follows a stream of poor economic data recently.
I March 2010 I suggested that the next interest rate move by the RBA would be down. I was wrong. They increased another 75 basis points in total in their April, May and November decisions.
My reason for suggesting they must move down is that the economy was much weaker than they anticipated, and the outlook far less bouyant. Given this recent data one must think that their optimism is slowly fading.
2011 will be a very interesting year indeed.
I think what's going on here is that capital is getting sucked out of other bits of the economy, causing asset prices in those area to deflate. Where is it going? The mining sector. So even though house prices are declining we're still seeing a massive wealth effect from all that extraction. I predict rates still have further upwards to go
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