My posts from over 2 years ago about interest rates and APRA

As some of you may know I have largely stopped posting on here.

Yesterday I couldn't help but to chuckle when I read the news that RBA and APRA finally decided to make the changes to lending pricing and criteria.

Over 2 years ago I was probably the only one that said interest rates in Australia, as they were at 1.5% official rate, are too expensive for our economy and lending criteria too strict.

I still remember the general consensus around here with majority of users was that interest rates within 18 months will be at 6%+ as they were predicting several rate rises in 2017 and 2018 and supposedly by now the official cash rate must have been over 6%.

Needless to say there was a similar talk around defending the lending criteria by APRA and we had these people posting graphs and what not and trying to basically rewrite the rules of economy and social sciences to prove a point

What I said back then was not only that both RBA and APRA were wrong in their decisions and policy but rather there was no need for a separate entity to the RBA, as financial regulator as they would both be out of sync all the time with each other.

Lo and behold interest rates are not 6%. In fact they are going to be lower than they were, APRA is going to relax lending criteria and above all they are doing it together (as if they were one organization) to make sure it has a proper impact.

Make no mistake, I am not after brag rights I will leave that for those who were obsessed about lighting up this place like a Christmas tree with their expert opinion. But I am here to tell them, I told you so.

I do believe that these may have well saved Australia from a certain recession and coupled with liberals in power we should start seeing prices going up in Sydney and Melbourne within the next 12 to 18 months as well.

 

Agree with what you said, I too posted somewhere previously but in more general terms.
If we look at history nothing or no monetary rule stays constant and the same. So for me it was just a timing issue when things change, that's all.
It seems just a common sense, there will downturns and upturns, and interference, but TIME is not still, and rules will keep changing whether we like it on not, just look at history!
Also agree with the noise here, many had crystal balls into the future...

 

Yes. I also posted something along those lines too.

 

Agreed,
I also said that APRA is just a lever.

Most said this is the new norm and it will not cange for a long long time.

Well its seems 2/4 years is it.

Let's see if and when the position takes change.

 

You were not alone mate a lot of people on here had the same thoughts. I love this forum but a lot of people’s comments fail to build in any redundancy.

It’s naive to think anything is the new norm and never going to change. It’s like when people say things like “yeah but those were due to A and B and those will never happen again..then along comes CDEFGHIJKLMNOPQRSTUVWXYZ..And then AA and so on.

Just because it looks different doesn’t mean it isn’t doing the exact same thing.

 

I did too pal, I remember not even 12 months ago someone here from Perth was arguing with me that rates would head back to 8 and 9s and I told him to to have his cardboard box ready because that where most will be living.
There was only one way rates were headed and that was down

 

@Tenex you da mannnnnnnnnnn!

I was starting to think the same thing early last year and the way I see things I would not be surprised if RBA goes down to 0.50% this time next year... Whatever has happened overseas can happen here too to some degree in regards to rates...

 

What’s changed? Some people’s borrowing capacity is going to increase a little bit? That’s what you are hanging the “I told you so” argument on ?

It’s looks like it’s going to be “less bad “ than it was , that’s for sure - but when you consider what has not changed , it doesn’t really warrant the chest beating.

existing debt will still be assessed at a sensitised P&I rate and indexed HEMs (at a bare minimum) will still be used for living expenses ...

As I said to you elsewhere - it’s like taking a 10k pay cut and getting a 2k pay rise a few years later . It still leaves you well behind where you were .

If they start allowing actuals again - then you should get excited.

 

It's a start. A trajectory shift.


Like the screw that was wound in
Now the screw is being wound out.


That's all I'm saying .

We are entering a different phase of the fiscal cycle.

 

I said two years ago that in in two years is will be 2019.

Told you so.

- Andrew

 

I would have said you were wrong, but now I see you were right.

 

Mr Tenex....yeah no way it was going to 6% plus...but it did hit 5% plus.

But the rates have not lowered yet.....the RBA is in a precarious position of not cutting too much so they are largely sabre rattling. Potentially....there is 1-2 cuts that is about it...

As for Sydney and Melbourne no I can't see significant price increase....

By the way how is your build going?

 

For once ...I agree.....******.

 

You were spot on too . Well played

 

This would be monetary. Our problem is the fiscal is lacking...

 

here is my example from AMP
1 from aug 2017, 1 from feb 2018
I just got 3.99% fixed for 3 years
looks like ive time it perfectly, I was on 5.79%

AUGUST 2017
Basic 1 year fixed rate (Investment)
Basic 2 year fixed rate (Investment)
Basic 3 year fixed rate (Investment)
Basic 5 year fixed rate (Investment)

4.84% pa
4.77% pa
5.07% pa
5.38% pa

FEB 2018
ATTACHEMENT

 

I said the same thing.

Geez, we all thought the same thing and a few of us said it.

 

#metoo

 

https://www.smh.com.au/money/invest...-but-the-boom-s-not-back-20190524-p51qus.html

 

I took a big break too because I got sick of being trolled. I've been posting a bit more lately and there is a whole new group of trolls. I don't have the energy to argue with them and even if I did there would be no point.

Anyway, many members mock "the herd" but this forum is just as susceptible to group think. I ignore the noise and do my own thing. I suspected interest rates would go down so I fixed one loan at great rate and left the rest variable. I'm glad I didn't follow the "wisdom" of the very vocal and very earnest crowd.