Another Interest Rate Drop?? What will happen

Discussion in 'Property Market Economics' started by MTR, 20th Sep, 2016.

Join Australia's most dynamic and respected property investment community
  1. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,183
    Location:
    Perth
    It will make property more expensive where as a rate rise will make it more affordable - oxymoron but its true, I think :)
     
    Peter_Tersteeg likes this.
  2. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
    I was originally from Adelaide, but my gf is from Sydney. At first she wasn't too keen on moving but she lives it here now and even some of her family have moved. Besides missing rugby league they all like it here.
     
    Azazel likes this.
  3. paulF

    paulF Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    2,103
    Location:
    Melbourne
    No rate drop today and seems like this will be the case in the short term.
    Sideways movements in different markets would be my guess but i think that foreign money has equal if not more control these days over our market than interest rates...
     
  4. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
    Last edited by a moderator: 3rd Oct, 2021
    vbplease and Colin Rice like this.
  5. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,183
    Location:
    Perth
    Last edited by a moderator: 3rd Oct, 2021
  6. Player

    Player Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,097
    Location:
    Paradiso
    Last edited by a moderator: 3rd Oct, 2021
  7. Blacky

    Blacky Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    2,066
    Location:
    Bali
    I agree. I dont see lower rates doing much at all. Long periods of low rates arent all they are cracked up to be.

    I read today that the markets are tipping a 53/47 that the fed will raise their rates in November. By this assesment it would indicate that a raise has not been priced into the market (at least not fully). If we drop our rates again, and the fed lifts theirs - our dollor will also take a hit. Maybe we will see sub .70 again?
    This too will have an overall negative impact on us - with the exception of the tourism sector which prefers a low $$.

    Blacky
     
  8. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,091
    Location:
    Brisbane
    Exporters prefer a lower dollar as well?
    Makes our goodies more attractive - not that there's many left.
     
  9. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.
    242417.jpg
     
    Player likes this.
  10. Player

    Player Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,097
    Location:
    Paradiso
    @Leo2413

    I laughed with your pic. Although he wasn't a vampire, it reminded me of Hannibal Lecter. My daughter wanted to watch Silence of the Lambs last night and so this was timely. Hadn't watched that movie for over 10 years. It's still a great film.

    Should property ever turn to custard in the short term if rates rise with gusto to circa 7's, then I shall eat up the deals with fava beans and a glass of Chianti. :eek:
     
  11. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.

    Glad you had a chuckle :) Love SOTL great film.

    I'm with you on snapping up deals if IR go up quickly. There will be so many deals coming on the market it wont be funny. I'm here to make money, no apologies offered. It's exactly the same thing as the stock market. Something spooks a company and share prices plummet wiping hundreds of millions off the board only for savvy investors to then buy up at good value.
     
    Gockie likes this.
  12. Blacky

    Blacky Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    2,066
    Location:
    Bali
    True.
     
  13. Ald

    Ald Well-Known Member

    Joined:
    6th Jul, 2016
    Posts:
    775
    Location:
    NSW
    Sydney and Mebourne are going to be smashed. This current boom we see is a game of pass the hot potato. People going in making $200k and existing, as the price gets higher, more start exiting and the last buyers standing find that the tide has gone out and they are swimming naked. Grab your popcorn and a drink the next year will be a year in real estate like no other.
     
  14. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    No different from any boom/bust cycle, we just don't know when and how much it will drop, the idea is to buy at the beginning of the rising market not at the end/peak.

    Also, don't make the mistake of comparing Sydney market to Melbourne market, they are different beasts with their own different drivers.

    MTR
     
  15. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    The RBA was at pains to point out that, overall, the housing market is slowing, with national price growth falling to around 3-5% pa, and most cities posting price falls in July.

    Interest rate falls I think is a positive for property markets, but you still need to pick the right market.


    [​IMG]

    At the same time, the forward indicators are pointing to softer conditions. Auction clearance rates are steady in Sydney and Melbourne, though on lower numbers of auctions.

    [​IMG]

    At the same time, the number of days it takes to sell a house has risen from recent lows, while the share of houses for sale has fallen to the lowest level since 2012.
     
    Last edited: 21st Sep, 2016
  16. wombat777

    wombat777 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,565
    Location:
    On a Capital and Income Growth Safari
    This is somewhat over-dramatised. APRA has been working for 18 to 24 months to significantly tighten lending standards ( which should soften the number of distressed sales, i.e. more breathing space ). It will take a significant decline in the economy, increase in unemployment and rapidly-rising interest rates for there to be a significant impact.

    Edit - not saying that a correction (not crash) won't happen but more people will (in theory) be able to keep their heads above water.
     
    Toon and Sackie like this.
  17. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
  18. Ald

    Ald Well-Known Member

    Joined:
    6th Jul, 2016
    Posts:
    775
    Location:
    NSW
    I am interested in your take on why Melbourne and Sydney are different beasts.
     
  19. hash_investor

    hash_investor Well-Known Member

    Joined:
    11th Oct, 2015
    Posts:
    2,439
    Location:
    Sydney / Canberra
    I don't interact with Melbourne guys very often but in my time in Sydney I have not seen a single "jobless" person (unless he wants to be himself) and I know all of them can save a deposit. I expect Melbourne is about the same.

    I don't see Sydney slowing down significantly but if you want to believe the media its your choice.
     
  20. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    Immigration, foreign buyers and economy... service industries
     
    Ald and Stoffo like this.