… and of course the power of leveraging works even more effectively in a falling market, which is why I have often suggested that continually ‘withdrawing equity’ in a rising market is a recipe for disaster. If you plan to ride out the inevitable fall, you’ll want to be at your lowest LVR level at the peak, not your highest!

Anyway, I think…[Read more]

Originally posted by Monopoly:
[Did you know you don’t own your front nature strip, you can’t plant anything on it and councils demand you mow it or they will do it for you and bill you accordingly??!!

Insider tip – in Victoria at least, there is no legislation which can be enforced to make a property owner mow adjacent nature strip. I’m not…[Read more]

Originally posted by easymoney:
Don’t worry I know about the American dollar and why and how it moves.
Good stuff. Here is an article you may be interested in.
One day I will pay to convert it back to Aus$ when the timing is right or buy stuff in America real cheap then pay to ship it all back over here.
It would be much cheaper to buy a Porch in…[Read more]

Originally posted by guzzi:
Well if the rates rise, investers sell then rents might increase about time i say.

w

I’ve heard this a few times but can’t say I agree with it. With more houses for sale, prices will become more affordable and tenants will be more inclined to buy. The only way rents are going to rise significantly is if wage…[Read more]

Out of curiosity only (as I have no interest whatsoever in investing in the US), have you considered the value of the US dollar? Do you understand why and how it moved this week relative to other currencies, what the likely future direction is and what implications similar events may have on US investments?
All part of your ‘due diligence’ I…[Read more]

Hi Cam

I’m fairly concerned with some assumptions you have made in your ‘due diligence’ (!)
$89,000 List price
$60,000 Offer (1)
$20,000 Renovation (2)
$140 pw (?) Rent Similar to others in the area.
$130,000 – 160,000 value after renovation (3)

1) You are assuming that 33% off is a fair offer and likely to be accepted. If this is so, it is…[Read more]

I would suggest this is not a good way to “join financial independence” in 6 years.

Cheers, F.[cowboy2]

Originally posted by unannounced:
I dont really see the big issue with HECS debt.

I do. This is a burden imposed on the younger generations by the legislation of a generation of baby boomer (or slightly older) politicians with the support of a generation of baby boomers all of whom had access to a free+ education. Bear in mind those same younger…[Read more]

Originally posted by ian_from_brisbane:
4 of the people who are currently in 5-person households (or 3 of the people who are currently in 4-person households etc) when everyone in the future decides they want to live by themselves.

I can only assume you are being serious?[blink]

From the Australian Bureau of Statistics:
Lone-person households…[Read more]

Originally posted by woodsman:
The recession did though.
Yup, and I believe the only reason we haven’t been in recession (yet) this millenium is because the RBA have provided consumers with easy credit, and they have responded by propping up the economy with record levels of household debt. Unfortunately this can’t go on forever. The longer this…[Read more]

Originally posted by ian_from_brisbane:
Prices cannot appreciate above inflation indefinitely.

Of course they can! If you are talking about a ‘house’ being a 3 br detached dwelling on 600sqm when everybody else in 50 years time is stuck in a high rise apartment, that property will look like a mansion and of course it will apreciate way beyond…[Read more]

Hi Derek,
I wonder whether the RBA will try to act to protect the situation described in the article:
“The other side of the current account deficit is that we’ve got a capital account surplus. The rest of the world thinks this is a great country to invest in and is willingly pouring 6per cent of GDP in as foreign savings.”
With IRs rising in the…[Read more]

Ok ‘Wood’sman,
We’ve got to balance the 4 million odd babies born between 1946 + 1961 (I think) – First one to 2 million wins!
Ready… Steady…[blink]

F.[cap]

…which really wouldn’t be the selfish thing to do! Providing you don’t migrate to another country and didn’t solely buy imports, every dollar you spend will help provide jobs for the younger generations, who can then use that same money to go out and buy houses and shares for a discounted price due to the oversupply caused by you and the other…[Read more]

I guess Brad means because the 5 & 10 year fixed loans have not been adjusted to account for the expected rate rise? Then again, perhaps they (the banks) know something that the commentators & media don’t!

Thanks for a very interesting post Kerwyn. I agree that things are looking grim out in the real world. I’m not sure at all that the RBA needs…[Read more]

Originally posted by oscar:
Would you sell your own home if it went down by 10-15%??
Not sell my own home, but I most surely would leave a hire purchase scheme if I could walk away without penalty and buy a bigger, better house down the street for less money!
Cheers, F[cap]

Hi Peejay – do you see any chance that we might end up with interest rates even lower than they are now?
Cheers, F.[cap]

jcls
I have no experience in this area, however I would advise that you look into rules for boarding houses as I believe there were some significant and potentially costly laws introduced post the Childers tragedy in QLD. I guess check with the local council.
Cheers, F.[cap]

Hi Jo,
Nope, I’m a baby boomer’s baby!
Thanks for the post. It seems to have some fairly sound reasoning, but it’s going to take a bit of thinking to get the most out of it, particularly in regards to investments. The impact of large withdrawals of support from shares & property is pretty clear, but all that money will flow back into…[Read more]

I agree with JP Morgan’s prediction. The RBA must raise rates, and soon. However I think this will be a temporary measure as even a 0.50% increase will decimate consumer confidence, spending and house prices. The effect on inflation, employment and GDP will not be immediately apparent and the reserve will be slow to react (again!) Once the…[Read more]