It is doubtful that anybody will be able to give you accurate advice on where interest rates are headed…we can only advise based on the information we've had in the last year. This doesn't indicate what is set to happen in the future. Case in point: back in March there was an article in the papers where a number of RE agents were questioned regarding property prices, interest rates etc. Most of them thought prices would drop further, and virtually all of them commented in some manner that interest rates were going to keep going down.

I had a couple of friends predict interest rates could hit 1% or even 0%. Guess what? They were all wrong. And so was I. I didn't fix back in the days it was cheap, and BASED ON CURRENT RATES AND INFO, I'd say that if you didn't lock in a rate by the final quarter of last year, you're already too late. Interest rates are sure to increase, but in my opinion not by too much more. IMHO, 8% bank rates will be the tipping point for plenty of buyers. Move a little more than that and there'll be huge issues for FHB. Until the economy is well and truly on its way (which could take the next 2-3 years assuming another major economy bubble ala China doesn't burst), interest rates should hover around 8%.

Now, let us all sit back and see how wrong the above prediction will be in the coming months.

BTW, if you don't mind me asking, what sort of fixed rates are you able to get?

A common feeling amongst the aged is: 'I wish I had taken more risks in life.'

If you get ahead while riding on the waves of what people initially perceived as a 'bad idea', nobody is gonna knock on that! Do what works for you. Obviously risks mean opportunity, BUT some are more risk averse than others.

Haha, just wanted to make the word 'but' stand out a little more.

An additional simplified comment is this: times are now good for those who own two or more properties, and particularly bad for those who actually own none and are trying to get in.

I don't think there's a bad time for property per se in the current environment of overwhelming demand.

For the average worker with a mortgage I can see the potential for a degree of mortgage stress. If inflation is higher than your pay rise, you essentially earn less than you did last year. HOWEVER, if interest rates are raised to control inflation, then similarly you still need that pay rise to support the increase in mortgage payments.

IMHO, and as a warning: an average working-class Australian with either one (ie. their PPOR) or no house at all doesn't stand a chance in today's system. Doesn't mean they should give up, but they better bloody hope for a decent pay rise in the coming years, or otherwise find another way out of this rat race if they actually still have spare cash for investment.

Should the average working Australian consider renting for the rest of their life? Personally, I think that might be the way to go, and having spare cash to then invest in shares, rather than tying yourself to a 30 year mortgage that will drain you dry as prosciutto and then leave you cash-poor and asset-rich in the only thing you have: your house.

I've also read I think, in Robert Kiyosaki's book, that your house is NOT an asset either, in the strictest sense.

Not everyone out there loves what they do, or the job they have. I'm one of those people. Yes, I'm thankful to have a job and to be able to see a paycheck every month, but work takes up 75% of my waking hours. And no, I don't like my work!

To me, retiring is not about doing nothing. 'Retirement' means to be able to work like you don't need the money, to be able to work 2-3 days a week so that things don't 'pile up'…to have the time to find this thing called 'happiness'.

Money doesn't buy 'happiness'. But you need money to buy you time, so that you can actually look for 'happiness', if you get what I mean. To me, working day after day for a paycheck and feeling that your debt will eat you alive if you ever get fired is no way to live a life. 'Retiring' would no doubt free up time to do the things you want, go on a few dream vacations, spend time with people who matter most to you.

What about those dreams you had as a kid? Perhaps it would then be appropriate to actually make it real? Do charity work, chase your favourite hobby, dance naked on the street…talk with your spouse, your kids, walk the dog, whatever! To me, the thought of being able to wake up to the sound of waves and the smell of a sea breeze, the glorious sun and not having to force myself out of bed is a thought that gets me salivating mentally.

It's better than dressing up in the mornings, downing breakfast in 6 minutes, leaving the house when its dark, gritting your teeth amid the morning traffic jam, dealing with clients (and in a few cases, their associated demands and difficulties) ALL DAY, and then coming home…when its dark, and then eating dinner before you slump on the couch and then catch your 5-6 hours of troubled sleep.

Free time versus working for your life. I know which one to pick.

There are inexpensive ones available. Case in point is the 180K one that my cousin and his newly-wedded wife bought. There are stiff regulations there, and in order to qualify to buy these off the govt (ie. not the ones on open market, that usually fetch above 400K), you need to meet these regulations. One of them is to be married.

If we're referring to the Orchard Rd variety, sure, my Grandparents living in seedy Orchard Towers were once offered 4 mil for their apartment as part of a proposed en bloc sale (which fell through in the end). To be fair, their apartment's floor area is bigger than that of my house and it was higher than the 20th storey, but damn, this is a freakin' apartment in a seedy area that we're talking about!

In Melbourne 4 mil will buy a pretty sweet penthouse, or a mansion in Toorak or Brighton.

Interesting info…even more interesting is Singapore at 14.4. Considering the vast majority of relatives my age are earning somewhere around $3K a month (on average, meaning that my bro and another cousin for example, are just on $2500), and a crap semi-d pricing in at least $1.2 mil, the multiple is more like 33 (assuming single income, and half that if double income). So I guess it really depends on what kind of housing we're talking about. If we're referring to gov't housing however, which is a high-rise shoebox at $250K, then the multiple is around 7, and a miserly 3.5 assuming double income.

Obviously nobody knows where ppty prices are headed. The rising interest rates have been much more predictable. I should have bet $50 (the approximate rise in mortgage payments I would need to make given 25 basis pts rise) on each of the RBA's meetings and I would be several hundred dollars on top by now, with odds of 3:1.  And if I lost each time, no biggie, because I'd be no worse off.

Who thinks the RBA will raise rates again today? They think that raising rates will control house prices. Wrong? Well, consider that an article I read states that with negative gearing, investors typically feel only half the pinch of an interest rate rise. So if the RBA went crazy with a 100 basis point rise that would send FHB into a crying fit, investors will take it like a bump to the thigh and just keep walking anyway.

So, is raising rates really justified in an environment that is dominated by investors, not FHB? Honestly I don't care, because I'm about to rent my house out anyway and move back with my parents. Haha! So there you go, RBA, in ya face!!

If none of the regulations changed, I think we can't be wrong with property. It's back to the simple equation of supply and demand. It's not as easy as with shares where a company can decide on a split as they wish. Subdividing or building units takes a heck of a lot longer. So if you have an increasing number of people clamoring for the same asset, prices are sure to rise. Is Australia likely to curb immigration rates? I dare them to, for they'll stupidly reduce the numbers of people who'll pay for the bloody pension as the baby boomers stop work. Let's face it: which govt will settle for LESS tax money? They still need to fill the coffers, and line their pockets. It's in THEIR interest to maintain immigration rates. Why would they care about housing? They probably have a few properties each.

Question is, will it still be profitable after factoring all your expenses? Only time will tell. Or even better, just sit in front of the calculator, punch some numbers and see for yourself.

It's administrative bullshit. It's how some bums-on-the-seat cushion warmers earn their massive pay each year by writing a thousand pages of trash. I think I know a few.

Thus far, all of the foreclosed houses I've seen for sale are always placed on auction. As such, they probably sell for market value, or in recent times, sell actually above market value. But hey, who's counting…

The thing you need to be careful of though, is whether there's any overlays or restrictions as to what you can build there. It's little point having acres and acres of land that's covered in trees which you cannot remove because of overlays. What if there is a limit to the footprint of your house, or the height to which you can build? Bear in mind also that once your neighbours have built up around you, it might limit where you can position your windows or balconies etc when you finally start to build.

What about potential for subdivision? Is there a covenant on the land to state you can't subdivide? Also, distance from the CBD is a relative thing and the prices can vary a lot depending on which side of the city we're referring to. For example, there could be a difference in prices in the East and 12km from the city and in the West and exactly the same distance out. Or what about difference in pricing in houses North or South of the city and at the same distance out?

Tree change is a lifestyle thing and I can see why it would be attractive, but do check out the specifics before you buy. Living at home for the next 10 years is a very real possibility for some Australians I think, including myself, and it might include you if you decide to buy land which has no income at all. Imagine moving out and renting, plus the mortgage on that land…I think you'd have to buckle down and share a house with a few mates and keep your weekly rent down to $100 a week in order to get away with it, assuming you're running on an average salary.

Certainly, cleaner, greener energy is the way of the future. But for now savings can be better had by just purchasing a $7000 decent second-hand car. The nicest one I have seen must have been that late 1980s Toyota my friend picked up from the side of the road at just $500. A bit rough around the edges but it ran perfectly fine.

The other thing that is to be considered is power vs. economy. I think the two are NOT mutually exclusive only when we look at today's diesel cars. When buying a car recently I had considered Hyundai's i30 diesel, which looks like a nice buy, considering it comes with auto for those of us who do a lot of travel in stop-start traffic. Ultimately though, I bought a Mazda 2 which handles nicely, is an absolute joy to park, and when there's only one person in the car (ie. the driver), performance is pretty spiffy.

Put 3 more people in the car though, and try the hills, and you'd realise the 1.5L engine tears a bit…not enough power. Gone are the days when people used to routinely tolerate 0.9L cars, even when ferrying friends around. My Dad told me about those. In order to get up an incline you had to accelerate dutifully on the way down first to ensure you even had enough momentum to get over the next hump.

Yesterday I saw them talk about the new Audi RS5 that had me drooling. I have a soft spot for Audis. Maybe I'll have one, in 30 years time!!