TIP: rates hold, new research shows cities are cooked, apartment developers face consumer action

Official interest rates will be down for a long time yet


If you're banking on a low interest rate environment for the foreseeable future, you'll be very happy with comments from Reserve Bank governor Philip Lowe yesterday. His posse kept official interest rates on hold at 1 per cent yesterday, as widely predicted, publishing expectations we're in for an extended period of low rates leading into some economic pickup in 2020.


Global economic uncertainty and sluggish domestic economic growth have required a lowering of inflation forecasts and admission from Dr Lowe that we should expect the RBA to "ease monetary policy further if needed" - read, cut rates again.


You can partly thank Trump's trade war with China. The jobless rate here at home is hovering around 5.2 per cent and wage growth continues to stagnate. Economists are staying true to their earlier predictions of another rate cut come November.


We know the property market is responding favourably to the combination of lower rates and better lending conditions. The AFR today is reporting that healthy auction activity is extending to the commercial space among mum-and-dad purchasers, albeit slowly, as activity spiced with caution picks up.


While some things change, others have stayed the same. It's still much harder for self-employed people to get a home loan, for example, even if the applicant is earning more than they would if employed by a third party. Looks like lenders are yet to get the message from advocates of the gig economy - or more likely, they've had more opportunity to dig around behind the curtain compared to the rest of us.


The answer may be to look for better value property purchases outside major cities. In comes the Regional Australia Institute, which has produced research in conjunction with Southern Cross Uni and the University of South Australia showing our cities are full, productivity is falling due to congestion, and our regional towns offer better jobs and lifestyle opportunities.


According to the report, it's a choice between economic stagnation if you live in the city, or a better life outside the city. Yes, it acknowledges, earning potential is much less - typically $80k average if you work in the Sydney CBD compared to $71k in a regional centre - but houses are much more affordable and the lifestyle more attractive. Not bad timing considering the ABC is resurrecting Seachange after a 20 year absence.


More legal action being brought against high-rise developers


We heard last week that Opal Tower residents are suing the NSW government over defects. Today, Toplace boss Jean Nassif is facing legal action from residents of his three Charles Street, Canterbury towers over defects and failure to comply with statutory warranties.


Similar action is likely coming for the collapsed Ralan Group. A protest by creditors is planned for this afternoon at NSW parliament, after Ralan Group went into administration last week owing approximately half a billion dollars to 1,800 creditors.