- Originally posted by Duckster:
I think great , ( I now have low debt)
I saw this coming 12 months ago and have lived through the 1992 recession we had to have !
The impeding property crash will be buying opportunity but remember that high petrol and interest rates take time 12 – 18 months to really affect the economy . I think we will see lots of morgagee sales in about two years time. If interest rates rise you have to wait for the fixed interest rate terms to run out and then a sudden 4 per cent increase on a home loan will crush home owners overnight.Good point. I did not realize delay factor, however it is obvious.
It will be a bit of snowball action when fixed interest rate period runs out and people will see an interest rise and at the same time RBA will introduce another 25 points on the top… Good help those young people who walking fine line generating “negative gearing†for tax purposes….[biggrin]
4% jump? just refix it for 15 years if you really think this will happen… here are the combanks rates:
Standard Variable Rate
7.82%*1 Year Fixed Rate
7.35%*2 Year Fixed Rate
7.35%*3 Year Fixed Rate
7.35%*4 Year Fixed Rate
7.49%*5 Year Fixed Rate
7.49%*7 Year Fixed Rate
7.59%*10 Year Fixed Rate
7.59%*15 Year Fixed Rate
7.59%*
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Public sentiment hit a 5 year low but of more interest was that it is the biggest shift in this indicator in 15 years.
Hmmmm what happened 15 yrs ago…Paul can you remember ???
… and those responsible are beginning a conditioning process. Maybe, just maybe they will be able to convince the sheeple that the blame lies with oil prices/global inflation/skills shortage… but the fact is that we have let them convince us that accumulating a massive mountain of household and foreign debt secured against unproductive assets is the way to lasting wealth. It’s not. It’s simply a passport and ticket to economic calamity. That’s where the real blame lays.
INVESTORS and home owners have received a rare, dire warning from the Treasurer to brace for the economic fallout from “world record oil prices”.With underlying inflation high and apparently rising, Mr Costello told reporters yesterday that the country faced a “great” risk of repeating the economic mess that followed the 1970s oil shocks.“Economic management is difficult; it is very difficult at the current time,” he said. “There is not much of a margin for error, I can assure you of that.”
Analysts said “management” was a euphemism for higher interest rates.
http://www.smh.com.au/news/business/brace-yourselves-warns-costello/2006/08/15/1155407809092.html
Fun times ahead!
F.[cowboy2]Foundation, I agree.
Been through that “recession we had to have”, survived the 18% interest rates (never want to eat 3 minute noodles ever again).
Never cease to be surprised when I hear someone (with a very average house and wage) say they have just spent $20k on a new whiz bang TV. Wow… that’s a deposit on an investment property they just chucked away.
Some people want it all now and aren’t afraid to be paying it off credit. They need to have a good long chat with thier grandparents about the recessions and depression they survived and how they did it. I know I can survive one, can they?
Good points but lets not forget;
Credit card debt is now 36billion WHY?
86% of “interest free store accounts” don’t get paid out and then people are charged upwards of 27% interest WHY?
Financial basics is what is missing in most cases “if you can’t aford to pay cash don’t buy it.
If you are a PAYG you should not have a car lease – the cost of leasing a car could pay off an investment property.
D
Hi D
Movement of interest rates are inevitable, wether up or down. For what its worth I believe rates will continue to rise as we seem to be under continual inflationary pressures at present with more to come. I think there is some potential for a spiral effect and I do not envy those making the decisions. Not a lot of margin for error in economic management.
I beleive there is always opportunity whatever the market conditions to profit from realestate, but you do need to do your research and put the best strategy in the right place at the right time. Yes, a challenge, but it gets easier the more cycles you live through.
There are still opportunities to fix loans at 6.99% for 5 years and you can allow attempt to negotiate with you financier. I am not one to die wondering.
Two properties I own are long terms with capital gains strategies type strategies and I intend to look at long term fixed loans for these two. Three others are CF+ and for sales for the right price, so I need the flexibility of variable rate loans. The last one is a reno/sub division strategy, and again variable for flexibility.
I am not all that phased to be honest. You manage, make a call and get on with life and delivering your strategy.
Cheers
SimonExactly Simon and time heals all wounds, then u r a guru to the younger people…
D
You must be logged in to reply to this topic. If you don't have an account, you can register here.
