Interest Rates Will Fall

Interest rates won't fall…
It's a hoax, just like all the spruiker stuff the real estate agents post.

Even *IF* RBA lowers interest, the banks will keep rising them anyway, so the situation will only get worse if the RBA drops interest rates. Have a look in USA. 2% interest rates.. lol.. and we all know how much THAT helped them ?  ( hint : They are a third world country now… )

how on earth does an extreme case in the US have anything to do with an intrest rate adjustment in a much better managed economy?  taking .25 / .5  of a high interest rate somehow plunges us into US style chaos?  give me a break……you had to much caffeine or something?

US is a third world country now?   have you ever lived in a 3rd world country?   they have issues that may take a decade or more to work through but they are not a 3rd world country.    They are becoming less of a force to be sure.

RBA may drop rates in 2009 but unlikely this yr, but the banks probably will take there time to drop, if at all. We may still see further rate increases from the big lenders without RBA lifting them as has already been evident.

Still keep an eye on the fixed rates, if they start to fall thats an indication the banks are hedging their bets on lower variables coming on line.

Scamp… I actually live in a third world country, have been for the last 6 years and the US most certainly isn't one whatever we might think of their financial mess. Making statements like that undermines your credibility hugely which is a shame as I was enjoying your bearish posts – I don't always agree with them, but they challenge my thinking and that is always good. 

As for interest rates … the RBA just like every other central bank is in a dilemma in that they face inflation rates higher than their targets which would drive them normally to increase rates, but the various economies incl. Australia are weakening and would normally need the lift from reduced interest rates. According to some the inflation in energy and food prices will not be halted by increasing interest rates and would only further weaken the economies …

By the way, i think interest rates will go down, but whether or not the banks pass that on might be a different story.  At least if the RBA lowers interest rates, and if the banks don't pass that on, then they're very unlikely to go up any futher, unless the banks want a full – scale riot!  Can you picture that, RBA lowers interest rates, banks then raise interest rates…I can't.

Regardless, these announcements of interest rates possibly coming down is a more positive tone than we've had for the last year or so, which can only be good news for the property market and us investors.

Scamp

Lost a lot of credibility with your most recent statements.

No one can make a reasonable assessment of whether RBA will decrease rates or not as they do tend to make mistakes and bow to political pressure.  US a third world country? –  US minimum wage is $6 per hour, they have a very low currency, they are recognising their problems, the bank deposits are insured to $100,000 per depositor and the Role of any Federal Reserve is to ensure the stability of the financial system.  I feel the US will fix their problems eventually and return to be an ever stronger powerhouse, but not without considerable pain from those who borrowed too much – they will all be wiped out.   

The RBA should not have decreased rates in 2002 – 03 but they did.  Now look at the problems.
 
Anyway, high interest rates put pressure on the housing markets and resetting loans deepen the problem..

But it is losing jobs and rising unemployment that finishes the job.  Higher interest rates slows the economy, increases borrowing costs for companies and individuals, company profits deteriorate, companies cut costs and sack people.  Unemployment rises.  This is the economic cycle or clock.  A country needs to have a recession every 5 years or so on average to keep it healthy and stop unrealistic expectations from developing.

Australias problem is we have been living in a perfect world for 15 years and we do not think a recession is a normal part of the economic cycle.  We have tried to rewrite the economic text books (because it is different now.)

It is not different now! 

Whether the RBA bows to political pressure and reduces interest rates or not will not stop the property market from crashing as people have taken on too much debt and now people are going to lose their jobs and not be able to service their debt.  The damage has already been done.

It is not rising interest rates that crash property markets, it is rising unemployment after massive expolsion in debt and after massive price gains.  

Australia is squeezed between a rock and a hard place.

Any reduction in interest rates will cause the $A to fall and this will cause imported inflation from all the imports we are sucking in.  We have stagflation.  Slowing economic growth and rising cost push inflation.  The oil price will fall, but the falling $A will negate this effect and put upward pressure on petrol prices.

Rock and a hard place. –  Now the pain must happen to correct our excesses of the past.   

There are only 3 ways debt disappears – paid back – taken back – or bankruptcy.

You mean like your genius hoax ?

Scamp wrote:

My genius plan was to advertise houses for 30% under the price of an auctioned house, with public viewings the same date as the auction, and the same times too, just to make sure I'm the only one at the auction
Nothing a RE can come up with that I can't counter.

http://forum.globalhousepricecrash.com/index.php?showtopic=35049

.

That's what I call a good plan, Scamp. Now all you need is to find a house without a reserve price and you could end up buying it for $1.

Scamp, do a bit of research and you will find you're incorrect on both counts.  The middle eastern oil producers/suppliers recently met to discuss increasing supply to help meet the extra demand from oil hungry China and India.  Also, there have been many reports on the fact that there is not enough real estate being build it Aust to match the demand, especially in capital cities…

Thanks for explaining wireless. Yes that's the main reason : speculation.

Anyway, just like with oil, there is NO SHORTAGE OF AUSTRALIAN HOUSES.

In fact, there are 900.000 EMPTY HOUSES in australia.

And.. how do you explain the massive amount of houses for sale ? If there was a real shortage, surely these would have been bought.

The only 'shortage' there is in Australia is one of luxury. Not having to drive 2 hours to work every day, not having to live next to criminals, not having to walk 800 long meters to the beach. Yes, we all want a McMansion on the beaches.
"oooh.. gee Bondi Beach is really crowded… it really sucks to own a house on this busy beach".

The fact that there aren't 1 million Ferrari's in Australia doesn't mean there's a shortage of Ferrari's.
It's just means people can't afford them…. that's all. Same with houses.

I won't discuss the housing shortage anymore : There is NO housing shortage. I have done the research, and there are 900.000 EMPTY HOUSES. EMPTY… NOT USED… 900.000 !!…

well share your research with us scamp where do you get your numbers from?

within 500 meters of my house there are 3 empty houses … the are being developed into multi unit sites.   There are many reasons a place may be empty.

In another thread you said that sellers are moving out and renting there places while trying to sell,  now you say there are 900k empty houses….we are we all living ?  under a corrugated iron sheet in a creek bed somewhere?