All Topics / General Property / Should I be buying now?

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  • Profile photo of Chris WhiteChris White
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    You’ve pretty much summed it up whiteknightoz

     

    • On a $300k loan, at 0.80%, repayments will reduce by $200 per month
    • The banks will reclaim some of their lost margin (i.e. 0.20%) previously lost in higher funding costs and therefore restore confidence.
    • Interest rates will fall further and the banks margins will continue to improve.
    • Median house rents have increased (in Sydney and Brisbane) by over 30% since July 2005 and are forecast to increase by another 30%+ over the next few years.
    • More cash flow negative investors will be become cash flow positive as loan repayments decrease and rents rise.
    • International immigration is at 19 year highs putting further pressure on housing.
    • Those unfortunate enough to be forced sellers (due to mortgage stress) are now renting and are placing further pressure on housing and forcing rents up. For example rents increased by over 17% in the South West of Sydney over the past 12 months due to this reason. Houses prices in the same region increased by a modest 2%, however still positive territory.
    • BIS shrapnel forecast approx 20% growth in property prices over the next 3 years and I agree with them.
    • Those buying well, adding value and are educated will do much better than these averages.

      

    From someone that is buying properties below bank valuation and increasing the rent after improvements then benefiting from additional market rental increases, it is a great time to buy property.

    Chris White | Pillar Property
    http://www.pillarproperty.com.au/
    Email Me | Phone Me

    The Property Investment Specialists

    Profile photo of wallyt99wallyt99
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    Alrighty then……..  

    Profile photo of devo76devo76
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    Just remember oil was going to be $2.00 bucks a litre  now. OOPS its droped.
    Interest rates will not drop. They will go up.   OOOPS there dropping

    Everytime the gloomers predict something it changes and they have a excuse for the change. Boring

    they will get it right eventually and i believe they will with lower house values but

    50% drop average  NO
    Depression   NO
    Collapse the dollar currency NO
    Head to the hills with your bag of seeds   NO

    These are the rants of a delusional mind. There like ogres huddled around a campfire predicting doom.
    Things will get rough and they will have there moment in the sun( Or dark depending on there mood)
    Then things will get back to normal and they will jump on the next impending earth killer.  YAWN.

    Profile photo of bardonbardon
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    devo76 wrote:
    Just remember oil was going to be $2.00 bucks a litre  now. OOPS its droped.
    .

    Peak Bollocks crude under $90

    hbbehrendorff wrote:
    What I am trying to warm people of though is that the central banksters and the many many many corrupt people in western governments (Including) Australia are trying to bring us apon ecconomic martial law,  This collapse is not just by random chance,  This is all planned in a bid to take over the whole financial markets.

    No problems with the NWO thing but are you sure you have the right forum for this stuff on a property investment forum, dont forget some people are in on it.  I think the NWO is the best thing since sliced bread and I am happy to see it getting closer and Ruddy talking up the Asian arm…..

    Profile photo of ScampScamp
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    devo76 wrote:
    Just remember oil was going to be $2.00 bucks a litre  now. OOPS its droped.
    Interest rates will not drop. They will go up.   OOOPS there dropping

    Everytime the gloomers predict something it changes and they have a excuse for the change. Boring

    they will get it right eventually and i believe they will with lower house values but

    50% drop average  NO
    Depression   NO
    Collapse the dollar currency NO
    Head to the hills with your bag of seeds   NO

    These are the rants of a delusional mind. There like ogres huddled around a campfire predicting doom.
    Things will get rough and they will have there moment in the sun( Or dark depending on there mood)
    Then things will get back to normal and they will jump on the next impending earth killer.  YAWN.

    AUD dollar is collapsing as we speak. Are you blind ? the dollar went from near 1 USD to 70USD.
    It will drop more now that the RBA lowered 1% interest. Please do your homework before you post something. That's a 30% drop in the AUD dollar. If that's not a crash then please, tell me what is.

    Inflation ( not CPI ) in Australia is close to 15% now. That's rampant. Just check your food bills compared to last year. Please don't tell me you don't pay at LEAST 15% more, because you do.

    Oil will be 2$ per litre. Especially with the 30 drop in AUD dollar and what's still to come. Fuel might be lower now, the only reason is that recession is hitting the world.

    About the depression : Just hope you don't get there. Because recession is a 100% certainty. Ignoring this won't make it go away.

    50% houseprice drop : Did I say it would drop 50% in less than 6 months ? Ofcourse not. In fact, I told you that the bottom would certainly not be earlier than January 2009, and with the recent actions by RBA and government, it will take longer because now it changed to a recession instead of an economic dip.
    You will see, 50% houseprice drop will happen.

    Dropping interestrates : Yes you are right, I predicted interest rates to go up and they SHOULD have gone up, but they went down. This is completely illogical and has caught most economists by surprise. The drops so far in interest have resulted in a 30% ( !!!!! ) drop in the AUD and it just shows that the RBA has no clue on what they are doing. They have a different agenda. Do you think the AUD dropping is a good thing ? Think again. The drop in the AUD is going to cause massive problems for Australia in the short / medium AND long term.

    Mind you : Dropping interest rates is done for a reason. In 1990 ( you remember, than recession Australia had to have ) RBA dropped interest rates like this. It caused 20% unemployment and loads of trouble for Australia.

    Please, don't speak about things you have no clue about. If you think you were right with the drops of interest rates, this is a very short term, PANIC ACTION by the RBA.

    House prices will now, more than ever, and with 100% certainty , drop 50%.

    There is no doubt. Recession is coming, commodities ( australia's main export product ) have already crashed on top of 30% loss of the AUD dollar. I'm just telling you like it is, nothing different.

    By the way, I'll let you in on a secret on the real reason the RBA has dropped the interest rates.
    Mortgage resets.

    And guess what ? people won't 'save 200$ per month'. They will go from their locked in low interestrates of 6% to the 'new' interestrates of 8%. They will actually have to pay 400$ MORE than before. Thanks to the mortgage resets.

    The RBA just wanted to make the blow a little less bad.
    Instead of going from 6% to 9%, they will now go from 6% to 8%.
    And the RBA has destroyed the only thing the Australians had ( their strong AUD )  by doing it.

    Please read what I wrote up here twice before you reply.

    Profile photo of IP FreelyIP Freely
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    If interest rates are such a blunt instrument, which has been carefully used in small  doses to slowly reduce demand in the economy how can the RB now justify a reduction of 100 basis points? (a real reduction of 16.67% ie from 7% to 6% – is this a gross over-reaction?)
    Should they have continued to slow the economy over the past 12 months when the slowdown was foreseeable since Oct 07?
    What will be the effect of a reduction in such a large magnitude? Will consumer credit once again become a concern? With the exclusion of the resources sector from the Balance of Payments, how big will the deficit be?
    What has happened to the risk premium (as inflation is tipped to hit 5% this year)?
    Will Krudd & the Goose use the 'big' drop in interest rates as ammunition for the next federal election?

    Profile photo of ummesterummester
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    IP Freely wrote:
    If interest rates are such a blunt instrument, which has been carefully used in small  doses to slowly reduce demand in the economy how can the RB now justify a reduction of 100 basis points? (a real reduction of 16.67% ie from 7% to 6% – is this a gross over-reaction?)
    Should they have continued to slow the economy over the past 12 months when the slowdown was foreseeable since Oct 07?
    What will be the effect of a reduction in such a large magnitude? Will consumer credit once again become a concern? With the exclusion of the resources sector from the Balance of Payments, how big will the deficit be?
    What has happened to the risk premium (as inflation is tipped to hit 5% this year)?
    Will Krudd & the Goose use the 'big' drop in interest rates as ammunition for the next federal election?

    The only thing that makes sense is panic – but considerring Australia is "better placed to weather the financial storm than the rest of the Western World" I am not sure what the RBA is worried about?

    It seems similar to what was going on in America before the sub prime broke into all it's glory – which is scary, because America has no end to it's financial problems.

    I was hoping the Australian RBA would be smarter, force inflation right down and decrease asset values in line with wages whilst simaltaneously increasing the dollar. They haven't. They may even, dare I say, create another mini spending boom – which will be bad long term.

    I hope Australian's can be smarter than their lines of credit…

    Profile photo of ScampScamp
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    Ummester : The reason the RBA dropped by 100 basis points is that they don't want the resetting mortgages to cause a rally of foreclosures like in the USA. ( you remember , I told everyone on here a few months ago that from September 2008 until July 2009 mortgages would reset from their low interest rates of 6% to the 9% interest rates ).

    The sad truth is that this rate cut doesn't even save 200$ for the average mortgage-owners money. In fact, they would have to drop the mortgage rates a whopping 4% (!!) in order to achieve this. The truth is that the RBA miserably tried to make the pain for the resetting mortgages a little bit less bad ( instead of going from 6% to 9%, the resets will reset from 6% to 8%, which is 400$ extra repayments per month ).

    And that is the reason the RBA lowered the interest rates. In the meantime , the AUD is crashing and the inflation is rampant. RBA is in a whole lot of trouble but they have chosen the long way out instead of the short crash. Basically Australia is now guaranteed more pain in the long run.

    Profile photo of harbharb
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    Scamp wrote:
    AUD dollar is collapsing as we speak. Are you blind ? the dollar went from near 1 USD to 70USD.

    I aways knew you were in denial but now you're getting into the desperation stage as well. What's the matter , our Aussie homes are to unaffordable to you ? Our Aussie dollar just returned to were it belongs, at around 70c. Anything above that was never going to be sustainable, only a fool would think that it was. I told you so last June at the same time I told you we'll be up for a couple of rate cuts before X-mas and mid 5s by next June. Oh noo , there are going to be more rate rises you said. Then you went on about how the banks will NOT pass any of the rate cuts and how by September it will be all over because of the rates resetting. Now instead of admitting you were wrong you are going on about the fall of the AUD by 30%. Well guess what Scamp, that's actually good news for most Aussies. (except for the ones planning a world tour )

    Quote:
    Inflation ( not CPI ) in Australia is close to 15% now. That's rampant. Just check your food bills compared to last year. Please don't tell me you don't pay at LEAST 15% more, because you do.

    Well I don't know about devo but I have found a farmers market where I do most of my shopping and my bills are actually down by 1/3.

    Quote:
    Oil will be 2$ per litre. Especially with the 30 drop in AUD dollar and what's still to come. Fuel might be lower now, the only reason is that recession is hitting the world.

    I'm sure that oil will be $4 one day , just not at the moment since oil has fallen MORE then 30% Anyway, with oil at $2/Lt canola becomes a viable alternative and the oil producing countries will have to use mineral oil for their fish and chips.

    Quote:
    50% houseprice drop : Did I say it would drop 50% in less than 6 months ? Ofcourse not. In fact, I told you that the bottom would certainly not be earlier than January 2009, and with the recent actions by RBA and government, it will take longer because now it changed to a recession instead of an economic dip.
    You will see, 50% houseprice drop will happen.

    So its January 2009 now? What happened to September which was the month we were all going to see the market collapsing ? Doesn't quite work when the new rates are the same or lower the the old ones, doesn't it.

    Quote:

    Dropping interestrates : Yes you are right, I predicted interest rates to go up and they SHOULD have gone up, but they went down.

    Your fault for not wishing it hard enough, next time you have to concentrate harder and hold your breath until it happens.

    Quote:
    This is completely illogical and has caught most economists by surprise. The drops so far in interest have resulted in a 30% ( !!!!! ) drop in the AUD and it just shows that the RBA has no clue on what they are doing.

    Yes, I agree. Stupid RBA doesn't have a clue about the state of the economy but not to worry, Scamp will come to their rescue from Holland. Thanks to Google and the boys at GHPC, most of whom also happen to live overseas, Scam P has the answers to restoring our economy and protecting our AUD.

    Quote:
    Do you think the AUD dropping is a good thing ? Think again. The drop in the AUD is going to cause massive problems for Australia in the short / medium AND long term.

    And what are the problems, can you please name them ?

    Quote:
    Mind you : Dropping interest rates is done for a reason. In 1990 ( you remember, than recession Australia had to have ) RBA dropped interest rates like this. It caused 20% unemployment and loads of trouble for Australia.

    Please, don't speak about things you have no clue about. If you think you were right with the drops of interest rates, this is a very short term, PANIC ACTION by the RBA.

    Excuse me Scamp, 20% unemployment ? Can you please do the same and don't speak about things you have no clue about. In 1990 you probably were somewhere in Holland attending a kindy garden so why pretend you know something about Australia of 1990 ?

    Quote:
    There is no doubt. Recession is coming, commodities ( australia's main export product ) have already crashed on top of 30% loss of the AUD dollar. I'm just telling you like it is, nothing different.

    Scamp, if you had a brain you'd be dangerous.
    Our commodities are priced in USD, a lower AUD makes up for the fall in commodity prices and is good for exporters.

    Quote:
    By the way, I'll let you in on a secret on the real reason the RBA has dropped the interest rates.
    Mortgage resets.

    I hope you did not have to pay for that secret, if you did you better ask for your money back.
    The reason they dropped it is to restart the economy, and the reason for a larger then expected drop is probably because they know the ECB will drop theirs at the next meet by at least 0.5%.

    Quote:
    And guess what ? people won't 'save 200$ per month'. They will go from their locked in low interestrates of 6% to the 'new' interestrates of 8%. They will actually have to pay 400$ MORE than before. Thanks to the mortgage resets.

    What if they were locked in at 7% or more ? Guess what, we'll have another cut before X-mas and yes the banks will pass that one in full.

    Profile photo of devo76devo76
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    Ha ha ha. just as suspected. Things didnt pan out as he predicted so the boys at GHPC have a rethink. Develope a new story to explain a change and then start pushing that as new FACTS.

    Here is my prediction for my area
    10% to 15% drops so far
    More drops of maybe 10%
    Possible recession
    Minning slowdown
    House values to remain stable for up to 5 years.

    Now this is FACT everyone. dont dare argue with me.

    Profile photo of crashycrashy
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    Scamps predictions and outcomes:

    USD to crash – USD has become a safe haven and has instead rallied
    rates to rise – rates dropping through the floor
    Aus property to fall 50% – down 5 – 10%
    oil to hit $2 – oil was priced in USD and oil only went up cos USD was so weak
    AUS MORTGAGE RESETS???!!!!

    Scamp, you realise you are making a complete fool of yourself?

    Profile photo of ScampScamp
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    mortgage resets are a problem. The fact that it's not visible yet means nothing. Everything takes time.
    The fact that the US dollar has risen has to do with the offselling from hedgefunds as requested by ( amongst others european ) banks. This is done in dollars which will be shed very soon. The dollar is plunging , and will plunge much deeper. The trillions of dollars required for the bailout will make the dollar fall further.

    To think that a lower dollar is good for the economy is, to say the very least, ignorant. Your BHP executives might get more dough but 99% of the people will have effectively lost 30% purchasing power. Mining company shareholders get paid in ozzie dollars. It's a sham to make you think that australia will get rich by a freefalling AUD. Have you gotten a payrise of late to make up for your lost money ?

    If you think USD is a safehaven.. well, I wish you good luck with that

    Profile photo of harbharb
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    Scamp wrote:
    To think that a lower dollar is good for the economy is, to say the very least, ignorant.

    What happened Scamp, did you changed into AUD to early ?
    Just asking because recently you seem more concerned with the 30% AUD fall then the lack of fall in house prices.

    Profile photo of ErikHErikH
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    My views:

    The 30% drop in AUD had NOTHING to do with interest rates, but everything with the carry trade unwinding, that is institutions borrowing in low interest JPY and investing in high interest AUD/NZD. These trades were unwinding because of risk in the financial markets as a result of the credit crunch. This became a self fullfiling spiral where initial sales forced more sales.

    In uncertain times the USD has done well as it is still seen as the prime reserve currency. The AUD has suffered from the carry trade unwinding, the move of funds back into USD and the drop in commodities (AUD is strongly linked to commodities).

    The AUD is now oversold and is very likely to bounce back although the current downward trend may well continue for a bit longer. The interest rate cut won't have a dramatic affect as it was priced in the market and all other reserve banks will follow suit (but likely with smaller cuts, Bernanke has already indicated the US is looking at a rate cut).

    Profile photo of ScampScamp
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    ErikH wrote:
    My views:

    The 30% drop in AUD had NOTHING to do with interest rates, but everything with the carry trade unwinding, that is institutions borrowing in low interest JPY and investing in high interest AUD/NZD. These trades were unwinding because of risk in the financial markets as a result of the credit crunch. This became a self fullfiling spiral where initial sales forced more sales.

    In uncertain times the USD has done well as it is still seen as the prime reserve currency. The AUD has suffered from the carry trade unwinding, the move of funds back into USD and the drop in commodities (AUD is strongly linked to commodities).

    The AUD is now oversold and is very likely to bounce back although the current downward trend may well continue for a bit longer. The interest rate cut won't have a dramatic affect as it was priced in the market and all other reserve banks will follow suit (but likely with smaller cuts, Bernanke has already indicated the US is looking at a rate cut).

    are you for real ?
    The USD is doing well ? haha.. you clearly do not know why the USD is having a dead cat bounce my friend.
    European/Asian banks are having their hedgefunds sell off their stuff. This is ( unfortunately for them ) done in USD, which have to be bought and this increases the price. The fundamentals of the USD are GONE.
    USD is in for a freefall , and this will happen when people are done selling off stuff and buying USD's.

    The AUD drop has everything to do with the RBA rate cuts. You say it yourself , here :
    that is institutions borrowing in low interest JPY and investing in HIGH INTEREST AUD/NZD. These trades were unwinding because of ( and here it comes ) THE LOWER INTEREST AUD

    Fantasic, at least you tried to get it right. I corrected you , now you know what caused the dropping AUD : The RBA rate cuts.

    PS : as a sidenote : Soon 'someone' will blame the drop in AUD is caused by the drop in commodity prices.
    This is *NOT TRUE*. Although they will try and use it as an excuse. Yes there used to be a relation between the two a long time ago, not this time though. Just keeping you up to date on the 'excuses list'.

    Profile photo of ErikHErikH
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    SCAMP, you are so full of yourself that it makes me laugh

    Profile photo of wellonthewaywellontheway
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    I found this article insightful when it comes to the reasons behind the plunge of the AUD – just as I expected, it is not as simple as I (or we) thought

    http://www.theaustralian.news.com.au/story/0,25197,24463330-5017978,00.html

    Profile photo of IP FreelyIP Freely
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    Scamp wrote:
    mortgage resets are a problem. The fact that it's not visible yet means nothing. Everything takes time.

    Scamp, what are you referring to when you call on resetting mortgages? In Oz only a small % of loans are on fixed rates (not resets – totally different scenario).

    Profile photo of AjaxAjax
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    Scamp,

    are you even living in Australia? Were you living here in the 1992 recession we had to have. I was. Unemployment did not exceed 12% (you say 20%).

    Interesting to see you call the fall of the Australian dollar by 30% the crash. I suppose it is if you are an importer or intend to travel and spend your wealth overseas or are an FX trader.

    Most of us here stay put in Australia. We don't notice the rising  or falling AUD that much…since 2000  its been as low as 47c and as high as 98c. The volatile AUD doesn't seem to afffect our ability to do day to day activities too much.

    Profile photo of hbbehrendorffhbbehrendorff
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    Dollar is falling once again,   currently 66c,  But like you said,  The price of our dollar dosen't seem to affect our ability to do day to day activities,   You know like,  Buying imported food from the supermarket.

    Much of the world is starving,  Even china is underfed,   while Australians are that fat they can barely see what's going on around them,  Millions of westerners died because of starvation during the great depression,  What would happen if Food imports comming to Australia stoped ?

    But please don't listen to me,  continue to live in your bubble of unprecedented ecconomic booms and equity goldmines

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