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RBA Warns Easy Global Policy Lifts Risk of Office Price Fall

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Australia’s central bank said easy monetary policy globally is spurring demand for the nation’s office buildings, even as vacancies climb and rents fall, raising risks of a future price slump.

“Prices have continued to rise at a national level, driven in particular by investors’ search for yield in the global environment of low interest rates and ample liquidity, with the lower Australian dollar also likely to be adding some impetus to foreign demand,” the central bank said Wednesday in Sydney. “The risk of a large repricing and associated market dislocation in the commercial property sector has increased.”