How many (if any) rate rises do you predict for 2022.

Its a bit higher. The chart shows 200 not 250, what RBA predicts.

 

When is/was the IO cliff?

 

https://www.google.com/amp/s/www.cn...ons-drop-to-lowest-level-in-over-2-years.html


Article was from Feb so May have changed since but with rising rates I’m not too sure.

 

3 years ago, now, next year, the year after.

 

its passed

 

its all about inventory. I think there is 6 months
Also they cant build enough homes in current market ie supply issues, labour issues. All contributing to boom

Also as mentioned impact of interest rate rises will be different from Oz.
Every week I see new highs on my properties on zillow.
But if it all goes to hell I have cash flow

 

We got bailed out due to interest rates dropping to historical lows. Now the worm is turning

Investors who have been in the game for a decade or two will be perfectly fine

 

A lot was occurring over 2019 and 2020.

Because of Covid people got a break including mortgage freezes. Some would have sold...some refinanced ...and some would have locked into cheaper fix rates. Now it will reset...in 2023 thru 2023 when their lower fixed rates come off from 2% to even 5s.

 

Too much debt in Oz. Australia Number 2 globally

 

These "cliffs" including the interest only cliff, never manifest in the end. This is because the cliff hypothesis assumes people can neither refinance nor afford the higher repayments - and this group would be a tiny proportion of consumers. Those on IO loans are mostly investors who can typically adapt one way or another.

 

'Fixed rate' is the new cliff
These TFF sponsored cheap fixed rate loans, around $4/500bn of them, are due in 2023/24.
Most of these loans are around 2%,
if one goes by Australian bond market projection, MR in 2023 may hit 4.5 to 5%.

here's NAB fixed rate cliff

 

These cliffs are risk projections, not fate

 

I think most of the $120B at NAB fixed at below 2% will be able to tighten their belt and wear at least 2-3% increase.

There will be an impact though. Even if a small portion decide to sell their investment or home, it will increase supply and potentially push prices down

 

Though 2-3% makes a biiig difference to $1mill+ loans monthly payments… no escape option of selling higher anymore which has been the get out of jail for last 15 years

 

Agree with this. Cliff is a great word for media to headline articles with and create clicks but that’s about it. Australia’s retail credit frameworks are robust and allow for increase of rates up to 6-7%. Existing mortgage holders ticking over to higher repayments won’t damage anything except the consumer economy. As more money goes into mortgages less will flow into purchases.

At that point our central bank will see inflation has been captured and rates will most likely plateau or drop if the inflation flame needs stoking again. These reasons are why I feel this new trajectory can only play out for 3-5 years.

I could and have been very wrong though so who knows.

 

Yep...in particular Sydney...if ya only knew the extent....

 

I'm not entirely against your idea, but keep in mind it's been easy to refinance when rate has been dropping for the last 30 years. If anything looks like a cliff, it's the next 2 years for me.

 

What Will Rising Interest Rates Mean For Australia's Property Prices?

Interesting data about price fall if interest rate rise to 4.5% bank rates.
Every state will be affected. Nobody is immune from price fall.

 

ANZ Senior Debt is now at
[email protected]%pa
[email protected]%pa...

Its interesting as 12 month ago 3Y SD was at 0.5%pa

 

Interesting but the article is all over the place and even predicts at one stage house prices will increase with rate rises?!!

biggest factor it pins this on is massive wage growth..

imo won’t happen since immigration workforce can always come in at a lower cost hence downwards pressure on wages…