All Topics / General Property / Banks increase rates today UP from 8.95 to 9.03 (anz – westpac)… I told you so !

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  • Profile photo of wealth4life.comwealth4life.com
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    Hello all, while others have been trying to upbeat the market my research and communications with high positioned executives have been against these bad advises.

    I am not negative in any way and my integrity is toward the greater public to present an opinion based on research to assist you in making the best future decisions … when you lose money it takes a long to recoup your losses and I wish nobody on this site miss fortune, so with that out of the way here are MY predictions and in my opinions only for the next 6 months.

    Get proper advise from an accountant or experienced financial adviser for any decisions over the next 6 months.

    Banks are positioning them selves NOW for a down turn and worse times ahead.

    Top valuers are adjusting their position of the market which are affecting PPOR equity and borrowing capacities

    Harvey Normans share price is down 25 percent, this tells a story …

    Credit debt is at 50 billion dollars, highest in the world per head of population

    Personal bankruptcies are up 8.6 percent

    Auction sales of vacant land in Sydney's Nth Shore is 40% under asking prices

    Do not buy an investment property unless it has a 3 year rental guarantee and an independent valuation

    There are some unbelievable bargains coming up, do your research well

    Peter Switzer predicts that if we hit a recession banks will drop their rates to prevent blood ahead, if this happens and I don't see how it can the tax payers will have to compensate it, this means we will be in a subsidized recession. Remember that some ones bad luck is some one else's good luck, this is an exciting time for us all and there will be many lessons learnt from it, oh more experiences.

    It's hard reading papers and listening to the news saying prices will increase by 18% over the next 3 years and then on the other hand banks are upping their rates coupled with rising petrol prices and rising cost of living. Groceries will increase in price because it cost more to transport it to the shelves and we have a RIPPLE EFFECT in the market.

    So what is in your heart – do you think the market has really bottomed, or is the BBQ chatter saying another story.

    The money you have today comes from what you did in the past …..
    The money you have TOMORROW comes from what you do TODAY … Philip Sigglekow (quote)

    Get all advise in writing and have your solicitor go over all the details as well.

    Best of luck to all … D

    Oh b4 I go a friend of mine called this morning and she told me that she just bought a property on Sydney eastern breaches near Cronulla for $300k down from $500k and renting for $510.00 per week with a 5 year fixed loan at 8.95 ??

    Profile photo of Jon ChownJon Chown
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    Hi ‘D’,  While I appreciate the sentiment that you described in your post (not wanting anyone to go broke or loose money), to say that you are not negative is just a total crock – there is little in your comments that could be construed as positive (apart from your friends decision to purchase what sounds like an exceptional deal).

     While it is true the Property market is in a state of flux at present, it is any ones guess as to what new developments will occur that will affect the state of play.  I believe that a positive mental attitude is better than one of doom and gloom.  It is fair to say that some people will loose their shirts (due in most parts to poor money management and bad or no planning).  Bankruptcies may well be rising but is this due to housing or poor business decisions?  You don’t have to be a home owner to go broke. 
    The other side to the current economic situation may include such issues as:- 

    Population growth is still upward.  (They will have to live somewhere)
     

    Housing construction is down.  (Whatever oversupply there is – if there is any –will be taken up and demand will push supply again)
     

    Supply of land to build on drying up. (Local and State authorities will need to do something – but we know how long it takes them to make a decision.  They will require study to be done first and then a study of the study)
     Rental vacancies at an all time low (Demand exceeding supplies forcing rent increases) 

    Higher yields on properties will encourage those people who have disposable income (There are actual people out there who earn more than they spend) to purchase investment properties.  This will push demand on an already depleted supply.
     

    The Mining and Resources boom continues to pay huge wages giving a portion of the work force massive spending power – (the smart ones might put some of it in property)
     

    Local and State authorities spending massive amounts of tax payer funded money on infrastructure and catch up capital works.  (Keeping people employed)
     

    Some smart boffin will invent a cost effective alternative to the petrol engine and oil will be relegated to history.  ( I remember reading a story in the 70’s about the fact that oil supplies were drying up and we would run out soon.  That was before someone invented the fuel injector which altered the equation)
     

    Getting proper advice from a Financial Planner or Accountant is the best advice that you have given.  There are still ways to make money out of property – even in a tough market.
     I for one refuse to believe that it’s the end of the world as we know it.

    Profile photo of hollandguyhollandguy
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    isnt this the same "wealth4life" who made comments about Ed Chan, and that if he or she was incorrect would remove themselves from this forum….?
    https://www.propertyinvesting.com/forums/property-investing/general-property/4323476

    Profile photo of yarposyarpos
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    wealth4life

    must be nice to communicate with high positoned executives…I'm impressed

    I cant argue with the motherhood statement of getting good advice,  it applies regardless of the times

    the other points are just a list of topics and without anything tying them together.  I can present a counter position and say so what? for example:

    Banks and valuers are forever doing what you are saying…its their job

    Harvey Normans share price….every stock has a story behind it, your point is what……Oil Search is up 60% this year a great story for their investors and PNG.

    Not sure what credit debt is but I cant find a reputable reference that puts Australia on top of a debt ranking table.  It may be the case but I just cant find it.  Can you provide a source please?

    Personal bankruptcies where,  and off what base?  8.6% is just a number and may be in line with changes that occur every year.  May also be just activity related as in boom times people create more businesses and a lot of them fail in any case.  These are also rear view mirror indicators,  bankruptcies usually get recorded after a long period of trouble and are more indicative of something 6-12 months ago than today.

    What are you talking about in regard to taxpayers subsidising banks reducing interest rates ?  I dont understand the scenario you are proposing,  sorry if I am being dumb.

    Jon- I loved your comment about the 70's.  Back then one of my bone headed mates sold a 6 months old , pristine , Torana XU1 because he beleived we would be out of oil in a couple of years.   Maybe he was just ahead of his time.  I trust that boffin does his or her stuff soon as the current and imminent mire seems more serious than back in those days.

    Profile photo of Michael 888Michael 888
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    Folks,

    Let's see things as they are and not worse than they are. I am not Pollyana, but neither is my glass half empty. As Jon has alluded to above there is still much demand for housing and people have to live somewhere. That we will probably see some sideways activity and slight further  correction in many Aus markets is probably a given……hence opportunities will abound.  Amongst the more pessimistic of the forecaters is BIS Shrapnel who consider a further 0.5 % rate rise this year (and possibly in one hit around Sept), then some sideways activity before rates begin to fall into next year.

    Be poised to optimise the opportunities that will present, and like good boy scouts and girl guides…….BE PREPARED to take action.

    There are deals everywhere. I recently picked up a block of land in a major Vic provinicial city (800 m from its CBD and fast train to Melb) with a lapsed 2 x 2 BR townhouse application for less than the price of my last car which is now eight years old (and not a  European marque). My worst case scenario for it was even putting a new turn key 4 BR box on it would give me a 30 % return (if I sold, which I won't) and the rental yield will be 7.5 % before depreciation.

    This little diamond in the rough is my cheapest purchase in over 20 years of investing yet will be the most profitable by way of  percentage return and manufacturing equity. There are diamonds in the rough every where and the rough may indeed get a little rougher before things pick up again…..eyes wide open.

    It helps not to be too negative and pessimistic. Positive thinking may not allow you just do "anything", but positive thinking will allow you to do everything better than negative thinking will.

    Yarpos, I wonder what the capital growth would have been in your mate still had the XU-1 (assuming it hadn't rusted out).

    Profile photo of Jon ChownJon Chown
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    Yes, I wouldn't mind having a mint xu1 in the garage.   I'm sure it would have proven to be an excellent investment.

    It's funny how moments in time change and our beliefs change with them.   A friend sent me an email the other day with extracts from the Courier Mail 1957.   Two stood out as interesting to me.   A Victor lawn mower cost 49 pound (approx $98) and the Unions were going to battle for a pay rise for Storeman and Packers current wage 13 pound 18 shillings (roughly $28).   Today you can by a Victor for less than half a weeks wage while it cost almost three weeks wages in 1957.

    Profile photo of yarposyarpos
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    well said Michael.  We need to adapt to survive.  Maybe you should change your icon to Morpheus?

    re the XU1?  a lot of capital growth I reckon…..the prices of iconic cars of that era have been through the roof for a few years now (another bubble?)  things like A9Xs and GTHOs have been pulling $50k and way beyond.   I love em but dont see that value….a bit like Grange Hermitage.

    Profile photo of bardonbardon
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    yarpos wrote:

    Not sure what credit debt is but I cant find a reputable reference that puts Australia on top of a debt ranking table.  It may be the case but I just cant find it.  Can you provide a source please?

    I reviewed this about four weeks ago and from memory Australia came about 31st on a ranking of debt per person 1 being the highest.  Ireland was third, Uk was  fourth and US was about 27th.

    The data is here

    Profile photo of bardonbardon
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    wealth4life.com wrote:
    Hello all, while others have been trying to upbeat the market my research and communications with high positioned executives have been against these bad advises.

    I got some advise from a family member who is in a very high position and they said that in their experience property values increase over time.

    It was from my granny who lives in the top floor of a high rise flat.

    Profile photo of devo76devo76
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    yarpos wrote:

    well said Michael.  We need to adapt to survive.  Maybe you should change your icon to Morpheus?

    re the XU1?  a lot of capital growth I reckon…..the prices of iconic cars of that era have been through the roof for a few years now (another bubble?)  things like A9Xs and GTHOs have been pulling $50k and way beyond.   I love em but dont see that value….a bit like Grange Hermitage.

    Ho,s are pulling well over $500,000 now. Some close to 1 MILLION although they have come back a bit. a Mint ht hk monaro gts can pull $200,000 and up. A9X,s are the same.I had a walkinshaw sold some time back but decided to hold on. Thinking of selling again. Offers above $100,000 considered. Its crazy.

    Profile photo of wealth4life.comwealth4life.com
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    Yes great comment Jon about the Victor Mower – now they are made in China ! go figure that and if you told a person that in 1957 you would be laughed at … ha ha how about the price of a house in 1957 with times earnings to yearly wage?

    Bardon you are soooooo funny that means your granny was/is a high flyer as well … hope she didn't invest her super into "Westpoint"

    D

    Profile photo of jasandlivjasandliv
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    I love the "told you so!" posts that are written a bit early… and i think your friend is telling fibs if there was no further information on the sale and yield of the property in cronulla in the original post. What street? Not happening. The only property i can think that would come close to those figures, she didn't check the strata minutes.

    Profile photo of ummesterummester
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    One man's doom is another man's boom. A much needed correction in market values of residential property is what every gainfully employed FHB is looking for. Jon Chown – downplaying the market may be exacltly what the greater population in this country needs. What you consider a negative comment from D could be positive to a great many others.

    I am no investor or anything like that but last weak I offerred 290K for a house advertised @ 350K. I thought the REA was going to laugh at me but he didn't, he took me seriosuly and advised that the vendor had set a reserve limit of 300K. He also said he was sure he could find me something in my price bracket in the coming weeks. This is in an area where everything was listed over 400K last year.

    There are more than 500 properties in allhomes for sale in the area where I am looking and only around 50 for rent (some of those are short term as the owner wants to sell). It doesn't take a genius to work out investors are trying to offload. In the month I have been looking only around 5 of those 500 have been listed under offer.

    This weekend I will put some 260-270K offers in. Stuff it, what do I have to loose? I can afford a house at that price and someone may actually say yes. Only thing I am afraid of is that whatever I buy depreciates another 20-30K in the coming months…

    Profile photo of BenEdanBenEdan
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    Hey ummester, you sound like an investor to me, or are you looking to purchase your PPOR? Allhomes – must be looking in the ACT/southern region. I know what you mean about nothing under $400K last year. I don't think it is just property investors selling up, I think there are alot of home owners selling up as they take packages following the cut backs introduced by the new the federal govt. This area always gets slammed whenever there is a change in government, no matter what side of politics you sit on.

    Best of luck with your deal hunting!

    Cheers

    Profile photo of ummesterummester
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    BenEdan – I'm only looking for a PPOR, just don't want to get ripped off! I take a very investor like stance to purchasing though, the Mrs will weigh in from the other angles:)

    You have picked the right area but cutbacks in my dept weren't as bad as initially forecast so I didn't think it was a factor. You're probably right though, I don't know what the other depts. are doing with more redundant staff.

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