Interest rate increase

There will be more interest rises I believe, but nothing to do with Singapore or what your looking at. I say .2 -.3 move up at least once in 16 and if RBA cuts, I would not bank on investors seeing any of it, which in effect is another increase because when RBA starts going up, you do not need to worry about that as every bit will be passed on....you watch.

 

If finance isn't available to build houses their will be a shortage of supply which is already increasing rents. , there are other markets besides Melbourne and Sydney. Interest rates are of no consequence now in many markets where houses now have strong positive cash flow, where rents have risen by 30%,and house prices have risen 10 % in the last year, rents have gone up but banks wont count any yield over 7% and the only count 80% of it. There is a difference between actual servicability, and deemed servicability. I for one have taken 600k out of housing, in just a month with the settlement of one house last week and another in 2 weeks, thanks to the current strong prices and inability to access equity, most of which will be going into the stockmarket.

 

If buyers can not source finance then no one is buying, then there will be an oversupply of stock as more properties come to market and no buyers...bust cycle. We are seeing the cracks forming now.

you took 600k equity, you were able to do this because property is/was booming in various markets in Australia. Boom cycles are much shorter than bust cycles, property markets do not boom forever, I wish. Boom cycles generally 18 months - 3 years.

We are now seeing markets change and auction clearances falling, if your strategy is CG don't expect this to continue as a buy and hold passive investor. IMHO Now is time to protect what you made

mtr

 

Here is how it will pay out...as the US rates increases...our dollar will drop..this will push up inflation as we pay more for foreign good and our economy rebounds as our goods get cheaper.

I believe we have 9-18 months before this flow through and depending on how much the US moves rates up...

 

But I think all was built in already, look at the dollar, more to do with how iron etc goes for now, also, what do you feel about the US rise ? I think they are not in great shape.

It took how long for the one rise, I am not so sure there will be another anytime soon, indeed they said they raised so they were able to act and drop if needed (make sense of that - they had nowhere to go).

Either way, if our economy picks up, we can hardly complain about that, as long as it is not let to boil...

 

That's the thing with the Aussie dollar, don't "they" want it lower than it is now? If the Fed raises more, it will drop our Aus dollar as sash posted. In order for our rates to be lifted by RBA the economy needs to be in better shape OR the inflation rate needs to be of concern or both to occur. Otherwise rates are stayin where they are or goin lower

 

I think Banks / Lenders will raise interest rates in the coming year as share holders will demand increased results.
RBA has no power... they may leave rates the same or even drop interest rates but what the banks do is totally different.