Leading economist: Interest rates set to rise and commercial property will sky rocket

[oracle]

Comments from BIS Shrapnel chief economist Dr Frank Gelber

"This season is going to be a season of very strong rises in interest rates that will last a long time," he said.

Despite a rise in rates, Dr Gelber says the pick of investments will be in the commercial property market.

"I've never seen a lower risk, higher prospective return, in the commercial property market, ever," he said.

Full article here


I guess most of us agree about higher interest rates in future. But comments about commercial property to skyrocket is very interesting. Don't follow or know much about the commercial property market cycle. So would appreciate comments from others who do follow and whether they have similar views or not.

Cheers,
Oracle.

 

[csc2]

Sorry, but I lost interest after you mentioned BIS.

Absolute duds is putting it mildly.

Personal opinion from having read their previous media releases over the past thousand years...

Rates are heading north, thats a gimme but how high is the key...as for the rest who knows

 

[rhyslivs]

I love the elaborate detail and analysis that he goes into upon which he bases his predictions.

BIS Shrapnel are crums.

 

[WinstonWolfe]

Would be nice to hear his full story.

I haven't heard anyone else forecasting strong interest rate rises. What's a strong rise? Does he mean the cash rate or cost of foreign funds?

A national insurance company I was interested in providing CIP for recently signed with someone else. The CFO told me on the weekend they have been waiting 4 years to negotiate a deal this good. He believes Brissie CIPs will be weak for a few more years, and I agree.

I am still looking for more active commercial investment, but find there's a lot of new CIP players who have done well in RIP and they are offering more than I would. And there's many debt free vendors who aren't in a hurry to sell. So I am being patient.

My view is the global outlook will remain flat with a little bump due to Obama's 50b infrastructure announcement....Australia's economy will become more 2 speed, so RIPs and CIPs won't average anymore than 5% growth pa.

Gelber is saying only 3.5% growth pa anyone. That's nothing marvelous.

 

[Mr. Fabulous]

I lost interest after you mentioned BIS.

Absolute duds is putting it mildly.

I thought exactly the same thing (I'm not sorry, though). Why people continue to pay attention to fortune tellers in fancy suits, I'll never understand.

 

[cloudyday]

I thought their call on the recession was spot on, however I'm not sure if they're referring to Australia or the world?

18 October 2004
"BIS Shrapnel still predicts a recession in 2007-08. Its report said a business investment bust in 2007 would follow the current rush to invest to meet demand."

http://www.abelrealty.com.au/news/DOM181004.htm

 

[Mr. Fabulous]

Hi cloudyday, that 'call' (as you refer to it) is what's commonly known as 'a lucky guess'. Make enough predictions and eventually one of them is going to be accurate. Unfortunately, most people don't look at the overall record, but instead focus on one lucky guess and say 'Oooohhhh, they were right!'.

Whatever.

 

[csc2]

We didnt go into recession actually so they technically were incorrect there as well...

I know many many many businesses that were unaffected by the downturn............

In a fair dinkum recession there are not many unaffected businesses except for debt collecting agencies.