Whiplash, tell them they’re dreaming

Discussion in 'Property Market Economics' started by Oliver Shane, 23rd May, 2019.

Join Australia's most dynamic and respected property investment community
Tags:
  1. dragon

    dragon Well-Known Member

    Joined:
    24th Jun, 2017
    Posts:
    90
    Location:
    sydney
    When do you think interest rate goes to 7% or 10%. Do u see that kn 5years time?

    Or aud goes to 0.5 usd?
     
  2. TheSackedWiggle

    TheSackedWiggle Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    1,826
    Location:
    canberra
    Aussie Household debt has not deleveraged in any meaningful way yet even after the fall and now happy days are back as regulators encouraging the masses to leverage it even more.

    Going from 4% to 7% the monthly Interest repayment rises by 75%, with the high household debt we have we simply can't afford go to 7% IR without high levels of forced defaults even with full employment.
     
    Last edited: 30th May, 2019
  3. Rex

    Rex Well-Known Member

    Joined:
    12th Feb, 2018
    Posts:
    1,010
    Location:
    Perth
    10% interest rates won't happen within the next 10 years. It would literally decimate households at current debt levels. Some sort of miraculous breakout in wages growth and inflation would be required to make the RBA lift rates to that level.
     
  4. Kangabanga

    Kangabanga Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    1,497
    Location:
    Brisbane
    Aud goes to 0.5
    Almost certain once usa does tariffs of 25% on all Chinese goods and that starts impacting our trade.

    Combined with iron ore prices plunging back to lows again once vale mines start production again.

    And RBA dropping rates to zero.

    Aus 10yr already 1.5%, Apocalypse coming..
     
    Perp likes this.
  5. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    982
    Location:
    New York
    The Chinese wont be returning due to removal of 50% LTCG discount and the ridiculous fees being charged to foreign purchasers.
     
  6. pvfv

    pvfv Well-Known Member

    Joined:
    14th Aug, 2018
    Posts:
    80
    Location:
    melbourne
    I think LNP offered bank guarantees only on entry level properties of any given location which I doubt buyer would buy them; even if it’s going to be small numbers.
     
  7. Kangabanga

    Kangabanga Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    1,497
    Location:
    Brisbane
    Thats not really a concern for those chinese just wanting to come in and flip houses or those wanting to diversify their asset base into aus. Their main problem now is the capital lockdown beijing side.
     
    Mongcamdi likes this.
  8. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    982
    Location:
    New York
    Agree regarding diversifying assets (eg protection from political persecution)
    Disagree regarding getting your capital out of the country.

    From speaking with people I know.....its not that hard. And its pretty cheap eg 5% "fee" will get you your cash anywhere you want in the world (generally from over-invoicing).
     
  9. Oliver Shane

    Oliver Shane Well-Known Member

    Joined:
    26th Apr, 2019
    Posts:
    388
    Location:
    Sydney
    5% fee to risk your whole family being thrown in jail.... seems cheap :)
     
  10. Blueskies

    Blueskies Well-Known Member

    Joined:
    24th Aug, 2015
    Posts:
    1,769
    Location:
    Brisbane
    I think it is important for any investor to reflect from time to time to see if they are trying to force a narrative on a situation just because it meets their personal biases or wishes.

    It not my job as an investor to have an opinion on whether the decisions of Govt, RBA, APRA et al are right, wrong or in the best interests of the community just how they will drive the market.

    If you honestly think lower rates, relaxing regulations and an investor friendly government are going to lead to house price falls, well good luck to you.
     
    petewargent and Dean Collins like this.
  11. Oliver Shane

    Oliver Shane Well-Known Member

    Joined:
    26th Apr, 2019
    Posts:
    388
    Location:
    Sydney
    That’s generally a productive mindset to have... one just has to zoom out and also look at the underlying causes of policy.

    Historically periods of intervention in property market by govt, FHB incentives etc have been during periods of stagnant or falling markets.

    Rate cuts are in response to impending recession.

    Generally it pays to invest heavily when the worst is behind a market, of course if one thinks that’s the case now.... the banks are all sorted, the economy will be stronger for longer and its back to business as usual, go nuts, risk up!
     
    Perp likes this.
  12. Oliver Shane

    Oliver Shane Well-Known Member

    Joined:
    26th Apr, 2019
    Posts:
    388
    Location:
    Sydney
    Doesnt it seem a little too easy... slight loosening of credit coming up and market starts roaring again like there was no 20% decline at all :)

    If it seems too good to be true it usually is
     
    Angel and pvfv like this.
  13. pvfv

    pvfv Well-Known Member

    Joined:
    14th Aug, 2018
    Posts:
    80
    Location:
    melbourne
    totally agree. loosening is only to stop the fall and hopefully this happens. however looking at how banks lent during boom time it may just fall further depending on lair loan size and IO feedback.
     
  14. Oliver Shane

    Oliver Shane Well-Known Member

    Joined:
    26th Apr, 2019
    Posts:
    388
    Location:
    Sydney
  15. Oliver Shane

    Oliver Shane Well-Known Member

    Joined:
    26th Apr, 2019
    Posts:
    388
    Location:
    Sydney
  16. Angel

    Angel Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    5,813
    Location:
    Paradise, Brisbane
    Some of us dont about Sydney and Melbourne. What about the rest of the country?
     
  17. Oliver Shane

    Oliver Shane Well-Known Member

    Joined:
    26th Apr, 2019
    Posts:
    388
    Location:
    Sydney
    Hobart only city where prices rose in May... not much of a national sport when prices are falling everywhere now is it :)
     

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia