Who's idea was it to increase interest rate for Investors?

That's a nice theory, shame the real world doesn't work like that, otherwise following this theory rents drop when interest rates drop, but we don't see that do we.

 

No, equilibrium price (rent) depends on both supply and demand...

 

Demand is based on the number of people who can afford something, not who might want it. If rents rose sharply then there'd be fewer tenants in the market due to the poorer ones being priced out.

I saw an article the other day that the Big 4 banks had a thin layer of capital, and that makes them very vulnerable to any downturn in the market. So the APRA is telling them to get their house in order, and by reducing mortgage availability they might also be trying to cool the property market.

 

Ahahaha.

Anyone who doesn't even have any idea what APRA is should not be investing in property.

Such a high level of mal-education in the ranks of property investors whore were spruiked into the market without any understanding of financial risks and the regulatory environment.

 

So did landlords lower their rents when rates were cut? Not really.

 

Just wondering whose idea was it that you have the privilege of thinking you cannot be charged higher interest on the Debts you owe the banks?

It's not your money. It's the bank's money. You can't complain unless you used your own money to buy property. Debt is debt. It's not an entitlement. You signed up to debt and the variable interest rate that comes with it. If you don't understand what "variable" means, read the dictionary.

 

Interest Rate and rent do have some relation to each other (might not be significant though)
When rates is dropping it means the economy is weak (inflation rate is low, hence wages growth is weak, and unemployment is higher), hence rent growth will be flat or dropping in some area (depending on vacancy rate).

Once economy is back on track (higher inflation, low unemployment) then RBa will lift rate, and normally rent will start to raise align with inflation (again this affect will be based n supply and demand. So in some area with low vacancy rate and high demand, you'll see rate will rise faster than some area).

 

They reckon repeating the same item from different angles is just repeating the same without anyone noticing,and you may well find some people in this site have held property in this site for over 30 years in between several different cycles ,.Caesar Pontem Fecit ..
http://www.cnbc.com/2015/07/29/fed-leaves-interest-rates-unchanged.html

 

When the US Feds start raising rates, expect a lot of funds to repatriate to America.

Australia being a net borrower of funds from overseas will find it harder to get lower cost of funding.

The crash of our iron ore prices means we will be in a worse current account position and it's not gonna be too long until 12:00 becomes 6:00

 

Um. That was my point.

 

http://www.abc.net.au/news/2015-07-30/terms-of-trade-collapse/6660716?section=business

Overall the terms of trade are down 13 per cent over the year, taking the measure down to its lowest level since 2006.

 

Yeah I know. Maybe not good to quote you.

 

If people don't understand how this will affect their property investments, they're driving in the dark without headlights on.

 

I think the reaction has been knee jerk, we have NAB and Westpac who's IT systems are not even ready to distinguish investor loans. Surely if they could see this coming 12 months ago, planning would of been put in place to add the functionality to the IT systems of both major banks so they could distinguish between the two. It's like ANZ jumped first, then CBA saw they could easily do it to, so did also. NAB happy to burn people with IO loans no matter if they're OO or Investors, Westpac can't do a thing currently.

 

Let's all collectively up our rents and punish the FHBs!

Their fault for trying to get ABRA to get the banks to up the interest rates on investor loans.

 

Abra ca dabra?

It is only a matter of time when interest rates start to move upwards and it will start getting harder for those who do not have a buffer.

The rates have moved because the banks need to reduce demand for investor loans, easiest and most profitable way is to interest rates whilst remove borderline loans to make their book look better.

 

Lol. You have to love a Fully Lucky thread. Asks who APRA is and then starts handing out lectures on macro economics. So entertaining... I still can't believe he's not a troll.

 

Are you sure he isn't?