On second thoughts, I think I’m going to have to pick apart the link provided by Ms Monopoly.
Even a cursory glance at Australian economic history provides ample proof of the link between inflation and interest rates. As you’ll see in Table 1, there is a trend between the two.
Basically, you can be sure that when the Governor of the Reserve Bank…[Read more]

Following on from my previous post and the interesting article above with regard to inflation & interest rates:
in·fla·tion
2. A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and ser…[Read more]

Hi unannounced,
We need to remember that the RBA acted to control pressures they felt may lead to inflation in the future. The impact on housing is not a major consideration at this stage.
So the answer to your question If the rate rises do not have the desired affect, what would happen then? A third increase? Is simply yes – whether house prices…[Read more]

Originally posted by Lizzy:
If you purchase an investment you DO NOT RELINQUISH The FHOG. You can still purchase an owner occupied property and get the FHOG later, as long as you do not reside in the investment. READ THE WORDING ON THE APPLICATION – IT IS AS CLEAR AS DAY!!!!!!! (just so there is no confusion again regarding this matter…)

Yes,…[Read more]

JPD, That sounds very fair. Out of curiosity, would you lower the rent if CPI was negative for a whole 6 month review period?
Cheers, F.[cowboy2]

It is a simple economic reality that if cost increase rent must increase.
You seem to be ignoring the fact that most rental properties were bought before property prices reached excessive levels. The landlords holding these properties are not under pressure to raise rents as a result of the interest rate rises, and can therefore undercut the…[Read more]

Originally posted by resiwealth:
Experience tells me that there are some bargins coming, so what do you think???? … “some ones bad luck is some one elses good luck”

I agree Resiwealth.
It is important to remember that any bargains arising from a falling market will only be available to those with equity remaining. The banks will not rely on…[Read more]

Originally posted by Deep_Pockets:
you have nothing to lose, everything to gain. And if something does go wrong sell it and get your money back.

[blink]…
You are kidding of course?
F.[cowboy2]

Interesting question!
Let’s see, the median Melbourne house price was $183,652 in 1989. Subtract 53%, adjust for inflation, that’s $154,572 dollars in 2004. That would require a 67% drop in real terms in 5 years. Even I’ll admit that is an unlikely scenario barring 70s style inflation in the high teens, and with growth slowing already… sta…[Read more]

Well, that depends on what happens over the next 5 years![biggrin]
It’s interesting to note that numbers from the REIV show the real value of the median house in Melbourne fell by 24.4% between the time when that quote was written and 1996.
Anyway, I posted it for the graph on the previous page, not as an endorsement of that prediction!
Cheers, F.[cowboy2]

Given that you are earning $80k, are DoubleIncomeNoKids, and your IP is roughly paying its way, could you not in 3 to 4 years either:
1) Pay down a large portion of your PPOR loan
2) Pay for the renovations out of savings
3) Both the above?

However, if you believe that your IP is currently over-valued, you might consider selling it to take…[Read more]

Thanks OSienna.
For the Australian perspective I think the following links should perhaps be re-posted too:
David Rees Commsec Presentation for the graph of house prices to wages on page 13 (extends to -100 years).

Oliver’s Insight from AMP in particular the 04/06/04, 01/12/04 and 03/09/04 issues.

But how to measure the value of an asset /…[Read more]

I think the following article contains valuable information about true house values, the factors that have lead to excessive house price inflation and what the future may hold:
Farlow Report

Cheers, F.[cowboy2]

Ok, I caught the rerun last night. Not a bad show – the general theme seemed to be that credit cards are:
1) Bad for consumers
2) Good for creditors.
That would seem to be pretty much common sense. The part that surprised me was when the reporter pointed out that one card company makes more profit than Microsoft!

On the subject of debit cards – I…[Read more]

Originally posted by AUSPROP:
those hoping for an interest rate induced property collpase may be disappointed:
Hi Ausprop,
Are you suggesting that the article you posted contains any good news or that a property collapse is innevitable regardless of interest rates?
Cheers, F.[cowboy2]

Good luck Kayleen,
Be sure to keep us all updated (just add to this thread and it’ll come back to the top). I enjoy hearing people’s experiences as they unfold.
Cheers, F.[cowboy2]

Thanks for the heads up, but sod it, the power has just gone out here on account of the wildest lightning storm I have ever seen.
Cheers, F.[cowboy]

Whew! This has become more than a little circular! Anyway, I completely agree. Rents will soon cover mortgage payments (with maybe a little left over!)
Cheers, F.[cowboy2]

Ah, yes. And he boasts of being a self made millionaire with $3,000,000 worth of cars in his garage! Wow, let me see, that’s… about 300 people paying $10k each. It’s easy to see where this guy’s money is coming from, and let me assure you it’s not all from being clever with investments.
Cheers, F.[cowboy2]

Originally posted by Ibuycashflow:
So, when you take away some of the investment properties and they become “homes” there will be a lower supply of rental properties available
And conversely a lower demand, as those houses are now homes to ex-renters.

Once again, if the flood of additional ‘investors’ didn’t have an impact on rents, why would an…[Read more]