Property Predictions - 2018

Will trail Sydney by 6-12months...
Sydney been declining for 5 months now so....

 

I agree interest rates are going up. To buffer against this I want to fix 2 of my loans. I think my 5 year fixed rate is 4.49%. That's pretty low. Any idea why the bank thinks interest rates aren't going up? If they thought interest rates were going up, would they not have 5 year fixed rates higher? I have been told that fixing rates never works because you can't beat the bank. With 4.49% fixed for 5 years, what am I missing?

 

Nothing. 5yr fixed rates are very good value.

 

In 2018, I'm predicting a crash in Brisbane.
I think a lot of money will continue to flow into Sydney and anything as far out as Dubbo will greatly benefit.
The far flung Western Sydney areas will be the new engine room of the country, surpassing even that of Sydney cbd.

 

Was there anyone on propertychat who predicted the perth property crash while we were living happy days in the mining boom? I wish I did what @MTR did and sell my girrawheen house when it peaked

 

If using stock market analogies then Perth experienced more of a correction than a crash?

Karratha. Hedland, Newman etc on the other hand were like triple crashes.

 

I was told that fixed rates can mean that you are unable to pay off the loan early (good consistent income for the bank). You might want to make a portion of your loan variable to pay it off early. Check with your lender/ broker.

 

Banks actually don't take a position on fixed rates for a term, they actually take the fixed price from the swaps market - so I guess the question is why is the market thinking that rates will not rise?

Probably traders forgetting that rates can actually rise, after having low rates for 7+ yrs.

 

you can never predict when market will correct, but you can buy when the market starts rising, no guess work with that one.

If you look at previous boom cycles you have at least 2 years, Syd and Melb been running much longer. I guess its a matter of managing risk

 

Yes, that is true. For these loans I am not planning on paying them back early. I would rather have the funds available at this stage then pay P&I when the loans switch from IO.

 

Thanks @Toby. That makes sense.