Publications

- December 1, 2019: Vol. 11, Number 11

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“Interest-ing” times: Low interest rates support Australia’s commercial property market

by Dinesh Pillutla

Interest rate expectations continue to remain low in Australia, providing strong support for the country’s commercial property market. This trend mirrors the experience across all major developed countries and is further compounded by the fact approximately one-quarter of the world’s debt is currently yielding negative interest rates.

Australian interest rates expected to remain low

The Reserve Bank of Australia (RBA) reduced the official cash rate by 25 basis points in October, following similar reductions in June and July. The 75-basis-point reduction has halved the official cash rate to 0.75 percent, from 1.50 percent in May. Such a large reduction has not been experienced since 2012, and was followed by one of the strongest periods of growth for Australian commercial real estate.

While all the major developed countries are going through an interest-rate-decreasing cycle, the Australian market continues to offer relatively attractive yiel

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