Seems it's no longer a question of if, but by how much the RBA will cut rates.
As I write this, my soundtrack is Dire Straits' Money For Nothing. It seemed appropriate given the subject that's taking up financial headlines today.
JPMorgan chief economist Sally Auld has gone all-out in her prediction that the Reserve Bank will cut rates four times by mid-2020, to a ridiculously low 0.5 per cent. Her reasoning is that such a series of drops would bring the cash rate down to a level commensurate with inflation at this time.
A counter-argument has been presented by Robert Gottliebsen in today's The Australian. He's effectively imparting rate-whisperer status to Gordon Brown of Legg Mason Western Asset Global Bond Fund, who is suggesting talk of multiple rate cuts in Australia has been greatly exaggerated.
Over at the AFR, rich-lister property developer Tim Gurner said rate cuts won't help; the real issue, he claims, is access to debt. "The market will not go back to normal because rates are cut. That won't happen until APRA gets its mortgage serviceability changes through."
Whatever the Reserve Bank decides next Tuesday, the banks are mixed on whether cuts will be passed on, and by how much, to customers. Corelogic's head of research Tim Lawless is out today arguing that we should see the lion's share of any cash rate cuts passed on due to the fact that funding costs for banks are much lower at the moment.
So how does all this sit against the market? If the 100-plus strong crowd at Cooley's auction room in Double Bay on Tuesday night is anything to go by, sentiment is up but actual purchase rates are still cool. Lots of bargain hunters and tyre-kickers, but also plenty of evidence that confidence is starting to return to the market.
Capital Economics is the latest house this week to issue its property market predictions. It has gone on-record to say property prices will rise by 3 per cent in 2020 and another 5 per cent in 2021 - but before that happens, we'll see another 3 per cent fall across the board.
Independent economist, Frank Gelber has an excellent editorial in today's The Australian, discussing the immediate and long-term prospects for the property sector and the broader economic factors that will have a direct and indirect impact on a return to price growth. Get hold of it if you can.
Big news from Mirvac yesterday, as it seeks to raise another $750 million in capital to bring its portfolio of property projects to $6 billion. The mix of office, retail, industrial, residential and build-to-rent projects planned for Sydney and Melbourne is impressive, as the listed diversified REIT moves to take advantage of improving sentiment through the stock offering.
Lastly, a little more from the Victorian budget handed down on Monday that will put a significant stagger in the step of land developers. The government has quietly slipped in plans to change stamp duty rules on major land development projects, saying that developers will have to pay duty on site values whether or not they're actually purchasing the land.
It's a move that for many developers, will make projects financially untenable. With Queensland, South Australia and NSW all releasing state budgets next month, this has put the wind up developers with the fear other states will follow Victoria's lead.