Diversified developer and landlord Stockland says it doesn't see deflation as an imminent threat, with cost savings from retailers and the higher dollar helping reduce the impact.
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Chief executive Mark Steinert said more companies were reducing costs in their supply chain by going direct to the manufacturer in places like China, and sending them directly to their Australian outlets.
"Our tenants are focused on improving supply chains, such as Kmart, and that has led to lower prices for consumers," Mr Steinert said.
"The other piece of the puzzle, that I'm sure the Reserve Bank is looking at, is the $A, which has strengthened and will help the cost of landed goods. So I don't see deflation as an imminent threat."
Mr Steinert said with employment growth stable and parts of the economy improving "I don't see any worrying signs and we still see economic growth at about 3 per cent".
Deflation concerns emerged this week as the consumer price index, the main measure of inflation in Australia, fell 0.2 per cent in the March quarter, taking the annual rate from 1.7 per cent to 1.3 per cent, equalling the low set in March 2015.
CommSec economist Savanth Sebastian said inflation was pretty much non-existent. In fact, in the March quarter, the Australian economy essentially went through a period of deflation.
"The economic environment in Australia is still far different from other parts of the globe, but when it comes to inflation, central banks across that globe are facing the same concerns," he said.
"The euro zone continues to worry about the deflationary threat from sluggish growth and sliding oil prices, while inflation remains below the Fed's target rate in the US. And here in Australia, inflation is holding below the Reserve Bank's target 2-3 per cent."
Mr Steinert said there was a 50:50 chance of a cut in interest rates when the Reserve Bank of Australia meets next week, which would be positive for the group's residential business.
His comments came as Stockland reported positive results across its business during the three months to the end of March and said it remained on track to achieve underlying earnings per security growth of 6.5 to 7.5 per cent.
Funds from operations per security growth is forecast at 9 to 10 per cent for the full 2016 financial year, assuming no material change in market conditions.
"In residential, we've seen strong market conditions continue in NSW; Queensland is strengthening, generating good demand and strong sales on our new projects; Victoria remains robust; and we had a good response to the campaign we ran in Western Australia," Mr Steinert said.
He added the comparable specialty retail sales growth of 2.5 per cent and comparable specialty moving annual turnover (MAT) growth was 3.5 per cent, with the strongest categories being communications technology, retail services food catering and fast casual dining. Total comparable annual sales across all retail categories was up 2.3 per cent.
