ECB cuts rates to 0.5% and may cut even further warns Bank President
The European Central Bank has reduced the benchmark repo rate by 0.25% to 0.50%.

Prospects improving in Poland report REAS
Overall real estate sales in Poland increased in February and March and developers are reporting that the high sales figures can be attributed to a growing number of cash buyers.

Australian property market already starting to recover
Low interest rates and rising confidence in the property market in Australia has resulted in national house prices rising by 1.7% in the first quarter of 2013.

Brazil starts ‘shortest and smallest’ tightening cycle
The Brazilian central bank has raised its base rate by 25 basis points to 7.5%, which is less than some market analysts had expected, with some calling for a 50 basis points hike, to fight rising inflation.

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ECB cuts rates to 0.5% and may cut even further warns Bank President

The European Central Bank has reduced the benchmark repo rate by 0.25% to 0.50%. ECB President Mario Draghi indicated that further policy action would be taken if needed and the bank expects the Eurozone economy to enter positive territory in the second half of the year.

However, Draghi is telling Eurozone government’s that they have to keep control of their spending and countries with lots of debt must push on with budget reforms.

He told an audience at Luiss University in Rome: “The struggle to come up with a common response to the sovereign debt crisis has had a negative effect in terms of how the financial markets see us. But now, we’ve reached the point where – for the process of European monetary integration to survive – we need a ‘growth compact’ together with the ‘fiscal compact’.

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Prospects improving in Poland report REAS

Overall real estate sales in Poland increased in February and March and developers are reporting that the high sales figures can be attributed to a growing number of cash buyers.

According to REAS, falling inflation and mortgage rates are also helping drive sales, and in April 2013 most banks were offering rates of 4.5-5.0%, compared to 6.0-7.0% twelve months earlier.

The company states: ‘If predictions of low and stable inflation within the next two years prove accurate, we might witness the lowest interest on mortgage loans in the history of the Polish housing market: at 4.0-4.5%, and in some instances even below 4.0%.’

Regarding new supply, REAS reported that in Q1 2013 six urban centres (Warsaw, Kraków, Wrocław, Tri-City, Poznań and Łódź) completed a total of 4,700 new units, which is over 2,000 less than in Q4 2012 and the lowest since Q3 2009.

Overall stock of property is falling now and the steepest declines, compared to Q4 2012, were in the Tri-City (-10.6%) and Wrocław (-8.7%). Moderate falls were observed in Warsaw (-5.5%), Łódź (-5.4%) and Kraków (-4.9%), while in Poznań the number of available dwellings fell by -3.7%.

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Australian property market already starting to recover

Low interest rates and rising confidence in the property market in Australia has resulted in national house prices rising by 1.7% in the first quarter of 2013.

This follows a rise of 1.8% in the fourth quarter of 2012 and prices are now just 1% below the peak of June 2010, according to the latest Australian Property Monitor house price report.

Melbourne , Sydney, Perth and Darwin all recorded significant increases in their median house prices in Q1, with Melbourne having the strongest price growth at 3.6%, which is the best performance by the Melbourne housing market since Q1 2010. Melbourne’s median house price has now risen by 3.7% over the past year but remains 4.2% below its previous peak price.

In Sydney median house prices increased by 1.6% and the city has now posted consecutive quarters of record level median house prices.

The resource capitals of Perth and Darwin continue to record hefty increases in median house prices as strong, low unemployment economies attract high numbers of workers from elsewhere. In Perth house prices rose by 1.3% and in Darwin they were up by 1.8%.

Perth house prices have now risen by 5.2% over the year to the end of March with Darwin up by 5.4%, the best performances of all the Australian cities.

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Brazil starts ‘shortest and smallest’ tightening cycle

The Brazilian central bank has raised its base rate by 25 basis points to 7.5%, which is less than some market analysts had expected, with some calling for a 50 basis points hike, to fight rising inflation.

Analysts say this signals a soft tightening cycle ahead, with the central bank still worried that it might hurt economic growth.

The decision ‘suggests that the tightening cycle is likely to be less aggressive than many seem to expect’, Neil Shearing, chief emerging markets economist at Capital Economics, reportedly said, adding ‘in fact, we think it will be the shortest and smallest tightening cycle in history.