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    Mixed messages on interest rates


Interest rates will rise again soon, according to the Australian Property Institute's six-monthly Property Directions Survey issued today (Apr 26).

But a National Australia Bank survey points the other way.

The respondents to the property survey are valuers, funds managers, analysts and financiers. Most expect interest rates to rise in the immediate future and over the next year.

They also said that increases to land tax in NSW were causing a downturn in units, houses and holiday homes.

The National Australia Bank (NAB) Quarterly Business Survey of conditions fell to 14 points in the March quarter, down from 16.9 in December.

Business confidence is also down, falling more than three points to 7.6.

NAB chief economist Alan Oster says the indicators show business conditions are continuing to moderate, which could motivate the Reserve Bank board to keep rates on hold when it meets next week.

'Whilst in the near term inflation is still a potential risk, that the slowing of activity is to such an extent that I think the Reserve Bank should really sit on its hands and watch and see what happens and that's what we expect to see as we go forward,' he said.

However, labour shortages point to rise in rates.

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