RBA banking on steady interest rates

The Reserve Bank of Australia said it would support a “steady-as-she-goes” position on interest rates in the short-term, according to the minutes of its last meeting which were published last week.

The central bank said most indicators were stable or subdued, with the exception of the strong exchange rate for the Aussie dollar, and it could see no reason to justify a shift in rates this month.

However, the one area of the economy that stood out from the overall unremarkable conditions described by the RBA was building approvals.

It noted that while business spending was subdued across most sectors, planned investment by developers of commercial sites was continuing to soar towards levels not seen since the Global Financial Crisis.

“Non-residential building approvals had increased in January and, in trend terms, were at their highest level since 2008, with increases evident across a range of categories, including the office, industrial and ‘other commercial’ sectors,” the RBA said.

It concluded that on current indications, “the most prudent course was likely to be a period of stability in interest rates”.

Adelaide faces spending cuts

Adelaide Mayor Stephen Yarwood was expected to deliver an “austere” 2014-15 Budget , citing $46  million of spending cuts to building projects.

The council has said that spending on Rundle Mall and Victoria Square upgrades had last year drained the municipality’s coffers by a record $58 million.

It plans to limit funding of new projects to around $12 million, while boosting maintenance of footpaths and other council-owned properties from $22 million to $30 million in the next budget.

Cr Yarwood said: “Just because we are not doing as many new projects doesn’t mean we aren’t spending on capital works.

“What doesn’t get across the line this year will be up for discussion next year,’’ he said, adding that there was still time for project priorities to change.

Public consultation on the draft budget will take place early in May.

Fast bids for Chapel St prize

A frenetic pace was set by a whopping 95 bids lobbed at the auction of a Chapel St shop in Melbourne’s South Yarra.

A Melbourne-based private investor placed the winning bid of $1.61 million on a 6.2% yield for the 55sqm building at 2/457-459 Chapel St.

Agents Teska Carson said the result beat the reserve by more than $150,000.

The property is leased to iconic couturier Godwin Charli for $100,000 a year on a five-year term from July, 2013.

Agent Michael Ludski said: “Properties like this – in a prized retail neighborhood with many high-end Australian and international retail brands, cafes, restaurants and bars – always attract a high level of interest and this was no exception.

“It is an extremely tightly held precinct and any property which comes to market provides a rare opportunity for investors,’’ he said.