THE central bank's decision to keep interest rates unchanged was met with a mixed reaction from property experts.
While the move, or lack thereof, says to the world that Australia's economy is stable, it disappointed developers and retailers who want more incentives to attract investors. The executive director, global research and consulting at CBRE, Kevin Stanley, argued that the Reserve Bank holding interest rates on Tuesday was a good sign as it showed the governors had some faith that the world was starting to sort itself out, especially in the US. ''But it is still very much a month-by-month proposition,'' Mr Stanley said. ''The resolution of the European mess is still a long way off and anything could happen yet. ''It is still early in the year and there hasn't been much official data released so far to show how the domestic economy is performing, so the Reserve Bank is still probably in a wait-and-see mode.'' Mr Stanley said for commercial property this decision will be largely ''business as usual'', as the cost of short-term debt remains quite high and it is being applied very selectively; no change there. ''For homebuyers, this decision will be disappointing, but not greatly,'' he said. ''Interest rates have already come down and buyers have not had much of a chance to get back into the market, given the last drop in rates was late last year and the residential market is yet to fully open up again this year. ''But the early signs of demand for residential property are encouraging, so it may well be that the lower rates are already feeding into a lift in confidence, so there's no need just yet to drop rates further.'' As Australia moves ahead, albeit at a slower pace than a year ago, other global markets, with the exception of Greece, are also making headway. Jones Lang LaSalle's Global Office Index showed the fourth quarter of last year as the eighth consecutive quarter in which prime office rents marked a gain. They were, according to the data, up a further 0.8 per cent over the previous quarter and represented a 6 per cent growth rate over the fourth quarter of 2010. Global office vacancy was also edging to the lowest point of the past two years, at 13.6 per cent. ''The majority of global leasing markets are holding firm and many are showing remarkable resilience especially among Canada, Australia, Germany and the Nordics,'' said a director in Jones Lang LaSalle's global research team, Jeremy Kelly. The firm's director for international investments and head of office investments, Simon Storry, said the underlying resilience of the Australian economy is again revealed in the latest global survey of real estate market trends. ''Demand for office space in Australia remains robust, with the national central business district office vacancy rate declining from 7.4 per cent in the third quarter of calendar 2011 to 7.2 per cent in the fourth quarter,'' he said. ''Unsurprisingly, the strongest markets have been Perth and Brisbane ... Australia's non-CBD markets are also recording strong demand, supported by a limited construction pipeline.''