FHOG, is better suited to the bottom end of the market and may push these properties up a bit. Especially 1 & 2 bedroom units for first time investors or those wanting to get in to the market around the 200K range. Might be a good time to off load a few cheapies and put the money to other investments.
There I was mentioning about two .5 rate cuts a few days ago and now they come out with predictions of maybe two lots of .75. Definitely good news for investors who don't have a cash flow problem or home buyers.
I just got of the phone from my mortgage provider only to be told that none of the 1% cut that happened earlier this month will be passed on to me
. Currently with GE on variable rate of 9.55%. Thinking of refinancing but $3,470 penalty fee if l do.Wish l'd known better when l trusted this mortgage broker. Not sure whether to ride it out for a bit longer and hope to get it down with the next few cuts or take the plunge and re-finance. Then choice of fixed or variable? Finance can be so hard to understand!
Susie
One of the Australian major Banks has announced a further 0.25% reduction in their variable rate this afternoon due to an easing in credit markets.
Funny that GE dont access their funds from the same market so dont expect them to drop again.
9.55% is a ridiculous rate so would definately be shopping around. Is it a lodoc deal ?
Richard Taylor | Australia's leading private lender
No, not a lodoc loan. Full documentation provided. Might start looking around.
Cheers
Wow for a full doc deal you would be looking at around 7.55% variable or 6.99% fixed !!!!
Richard Taylor | Australia's leading private lender
All this money sitting on the sidelines. Taken out of shares where is it going to go?
It either shares or property booming however neither have provide a return for sometime.
Either way knowledge is the key. Surely shares will bounce back larger than property. However using both strategies can only help retirement and a better lifestyle come around soon
Good luck fellow investors!Thanks C2 – rates could go a long way down yet. I heard something about 4.5% cash rate in general media yesterday.
I am sure many of us are doing the sums at what point you can build a new dwelling and hold at a cash neutral position.
There is alot of stock siting on the market in some areas so you would imagine this would get taken up first.
Don,
There have been some comments of 6% around March and 4-5% by mid next year. Xmas spending might hold the key to the economy and what may happen after that.
Richard,
What term is the 6.99% and is this pre or post 1% rate cut?
Hi Don,
I saw NAB have their 2 yr fixed loan at 6.99%
Don't know if that's what Richard was referring to.Cheers,
Suei wish i understood shares : (
i dont seem to have the time to really understand it fully , so i would rather invest in property…
However, i know at the moment you could probably make a shit load of money in shares if given the correct advice on what to buy
Any thoughts?
Wian
It's easy.
Buy on friday – sell on Tuesday. for the last 6 weeks you would double your money each week if you did that:)
Scamp wrote:yep , me too, positive about the sharemarkets in the future. Much more money to be made on shares than on property. Renting and investing is a much better option than buying a property.
Why lose 50K a year and even more on capital losses, if you can make 100K a year with the same investment ?
Doesn't make a lot of sense to me. I'd rather invest my cash in shares ( the right ones ) and make money instead.Plenty of opportunity is there, just not in property.
hindsight is a wonderfiul thing isnt it… Yes, there is plenty of money to be made now the share market has shit itself, but what about all the thousands and thousands of people who have blown their money over the last 3 months or so? everyoe is clever in hindsight, but the reality is, if you play with the stock market and dont know what your doing, and you dont sell at the right time, you can lose big time ..
cheers
Scamp wrote:god_of_money wrote:I am confused…. interest rates on the way down.. with prediction of some economist predict further cut next year…
Used to be lots lots of bullish comments about investment when the interest rates reaching its peak…bla bla bla long term value…dividend yield 10% and rental price still on the way up (better than 3-4 years ago)…. I can't understand why people shunned away from investing…. recession.. yes….. but is this time to buy… lots of preaching…buy low sell high???? I am not sure I got it wrong from invesment philosophy. Correct me if i m wrong
You cannot invest what you don't have. Banks will not give you money as easily as they did.
And that means 0.0% of the FHB's will get mortgages. This means noone will buy the starter homes, which means noone will buy anything else either. It's bound to crash, there's no question about it.It will crash until wage * 4 = houseprices = median houseprices of 250.000.
That's 250.000 less than now ( 500.000 ) which means a 50% drop.Just because FHB's aren't buying doesn't mean no-one else is. FHB's have just had another free gift from Lapdance Kev, so there'll be a few who can still buy due to that.
There will be far less buyer activity for sure, but there are always people with funds who want to buy a house to live in – at every price level.
The rest of the people who already own will either have to sell if they are cashflow poor, or if they are ok they will simply not try to sell their home in this climate. less buyers, less sellers. Nothing new.
A good quality property in a good location will still sell all day long. Maybe not for top dollar, but not a 50% drop. Even in places fo higher-end properties where there is much more fluctuation there is usually only around a 10-15% drop when things go pear shaped, and they are always the desperate sellers, of which there are few. It's not across the board; never has been – onlty the media talk in generalisations of that magnitude.
We also have far fewer "marginal" borrowers in Aus than the Yanks had, so I'm tipping a longer period of little growth and stagnating prices, and increasing yields, and dropping interest rates.
This is a green light for longer term buy and holders in the next 6-12 months.
You're way too emotional Scamp.
wian wrote:Scamp wrote:yep , me too, positive about the sharemarkets in the future. Much more money to be made on shares than on property. Renting and investing is a much better option than buying a property.
Why lose 50K a year and even more on capital losses, if you can make 100K a year with the same investment ?
Doesn't make a lot of sense to me. I'd rather invest my cash in shares ( the right ones ) and make money instead.Plenty of opportunity is there, just not in property.
hindsight is a wonderfiul thing isnt it… Yes, there is plenty of money to be made now the share market has shit itself, but what about all the thousands and thousands of people who have blown their money over the last 3 months or so? everyoe is clever in hindsight, but the reality is, if you play with the stock market and dont know what your doing, and you dont sell at the right time, you can lose big time ..
cheers
Imagine also if you are one of the zillions who are only invested in super.
OOPS.
rates down another 75 bp.
ka-ching
crashy wrote:rates down another 75 bp.ka-ching
No that cant be true. They were meant to be above 10% by now. And fuel was meant to be above $2 dollars and gold was meant to be around $1500 a ounce. Thats strange
foundation wrote:Huh? This only takes interest rates back to where they were last November.Where is the latest cut taking us back to, 5 years ago ? Wait another month and it 'll be back to 7 years ago.
How is your landlord doing, could you say hello from me and ask him if he wouldn't mind passing that rate cut to you so your rent go back to what you were paying 5 years ago. I'm sure he'll agree to it.Quote:So I'm not excited by the rate reduction.No , I guess you wouldn't be. Probably even less excited next month after another rate cut if your TD expires soon and goes from 8.5% down to 4%.
the only thing that excites (F)wit is "oooo goody, another opportunity to make crashy look stoopid"
ok folks……….where are all the opportunities now?
self funded instalment warrants lookin good…..
must be a lot more positively geared property around now?
harb wrote:foundation wrote:Huh? This only takes interest rates back to where they were last November.Where is the latest cut taking us back to, 5 years ago ? Wait another month and it 'll be back to 7 years ago.
How is your landlord doing, could you say hello from me and ask him if he wouldn't mind passing that rate cut to you so your rent go back to what you were paying 5 years ago. I'm sure he'll agree to it.I'm sure you have me confused with somebody else. I'm a (multiple) property owner, not a renter.
The latest cut takes the SVR back to August 2006 level according to the RBA measure for September (9.35%) minus the full amount of the RBA cut in October (1.0%) minis the amount the banks have pledged to pass on from the latest cut (0.6%). That is, SVR should be 7.75% versus 7.80% from August 2006… not quite sure where you got 5 years from? In November 2003 (that's 5 years ago, y'know
), the SVR was 6.80%.Cheers, F. [cowboy2]
. Currently with GE on variable rate of 9.55%. Thinking of refinancing but $3,470 penalty fee if l do.
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