Interest rate UP – where do we go from here ?
The rates will rise about a quarter of a percent.
in Australia. What will this mean to those of us who are in the market to buy a property ?Well, let us say that rates go from say 6.5% to 6.75 % (with possibly another half a percent increase in a few months) how will that affect our plans ?
Whilst some would be buyers may be fearful enough to abandon their plans to buy I cannot see that, at this stage, this (and possible further increases shortly ?) will cause too many people to be forced to sell their property.
So no bloodbaths producing extraordinary bargains there.
The way I see it, a small decrease in the number of willing buyers will nevertheless take the pressure off the prices and present opportunities to buy at a lower price.
If that is good for us as far as the buying is concerned does the other side of the coin mean that we may have (big) problems in selling at a profit the property we just bought ?
I would love to see how other people see this.
Pisces133
G’day Peter…
No bloodbath as yet.
I’m really not negative on R/E… just realistic.
Given a Bull Market that has lasted 6 years it should be expected that a reduction in prices is bound to occur. Even 10-20% is not as uncommon as some would like to think.
I expect another rise in rates in Dec. maybe even .5% for the Reserve Bank to show that they are fairdinkum. two rises in two months will cool the heels of many.
Over he past 5 weeks I have had plenty of evidence emailed to me that some people are over extended without any rate rise. Worse, some are relying on CG to fix their “off the plan” problems and at this stage they are nothing more than a hole in the ground.
It never ceases to amaze me that, in the cool light of day some already realise…”I have made a mistake” and are hoping like hell for a miracle.
This is nothing, people won’t even notice the difference in .25%, but I suspect the start of a whole new ballgame for some.
Personally, I am prepared to wait until 2005 at this stage, before I buy more Real Estate. I suspect that those who are buying today or just bought will get their fingers burnt.
For me… I will “write options” and don’t know or care which way the Shares or Commodity markets go from here. Many of the R/E hopefulls will also become the same in the share/commodity markets via options and lose a couple of thousand Dollars every 90 days. That’s just the way it’s always been.
Hope you get a balanced viewpoint Peter..
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]Hi Peter,
indeed where do we go from here….
Well I am not a property expert but have happily riden the wave of the property boom. I have watched my house value double since 1997 and in the last 12 months watched in amazement land prices in rural towns sky rocket in a bouyent sellers market. The developers are getting very rich and demand is exceeding supply and the result is staggering price jumps with the purchasers paying the price. I am nervous about interest rates because I work in new homes and it is nothing these days for a young couple to spend $250,000 on their first home with no deposit. I believe the writing is now on the wall that these easy times are nearing an end and housing will become unaffordable. It is my amatures view that all of us riding the wave will get a good slap once the FHOG is no longer available and interest rate rises sneak up even one percent, (which will happen in my opinion.) I believe the market will then drop down to a more sustainable level. My gut tells me the down turn is on its way and any one entering the market will need to wait a long time before they will see money from current prices. I will be waiting for the down turn before I buy again. I wondered if maybe I should invest in a wrap or lease options but at current market prices the value for money is not there for the purchaser or the investor. I think that I am just a bit too late. This of course is just my opinion and I would be happy to hear evidence to the contrary.Good Luck to all
(I wish I had a crystal ball!)
GraceyI don’t think the Government will abolish the $7K FHOG. Instead they will reintroduce the $14K FHOG or another form of assistance to the 1st home buyers. This will prevent the building industry from collapsing. Costello is well planned. He knows how to prevent a recession. Of course it will be a different story if Labor wins the next election. My 2c words.
Regards
Huey (a grandma who knows almost nothing about politics)
I don’t think the Government will abolish the $7K FHOG. Instead they will reintroduce the $14K FHOG or another form of assistance to the 1st home buyers. This will prevent the building industry from collapsing. Costello is well planned. He knows how to prevent a recession. Of course it will be a different story if Labor wins the next election. My 2c words.
Regards
Huey (a grandma who knows almost nothing about politics)
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