- devo76 wrote:Things will recover quicker than most realise then of we go again.
Then 1-2 years down the track the bears will look at spring 2008 and wish they bough while the prices were so low. Bloody specufestors beat them to it again and caused housing to again be unaffordable.
I think I just bumped into one of them today. This guy was looking at buying a house in Perth in early 2001 before deciding to listen to experts who were sure that prices have reached the peak and were likely to stay flat or even fall a few % over the next few years. He rented a flat in Freo for $120/week while waiting to save more of a deposit and maybe for prices to fall a bit. Bumped into him this morning and he is still renting the same flat only @ $240/week and a rent rise is in the wings, he is now hoping for a crash so he could maybe buy a flat. And boy does he wish he bought a house back in 2001 when the priced "peaked".
harb wrote:Sorry to burst your bubble unmester but the fact is that interest is coming down and we won't see 9% for a very long time. If the crash did not happen with rates going up then there is FA chance of a crash with rates falling. (yes I know, the banks will not pass them on. )
The percentage "drops" that you are talking about are mostly an illusion caused by the fact that a larger then average properties under $400k have been selling well (thanks to the higher rents) while the upper end stalled. Some who bought 2-3 years ago may not have been prepared for the many rate rises we had and had to sell at cost , a few repo's even below cost, but with rates falling that's mostly over. As I said before, unless a house sells for less then the previous selling prices there is no real price fall, we had the 0.xx% fall we had to have so I hope the bears enjoyed the property "crash" while it lasted . LOL
As interest rates continue to fall over the next 1-2 years and people start to upgrade once again you should see property prices returning to the average upwards trend. Or maybe you think that this time will be different ?BTW, what happened to all them mortgages resetting in September that were supposedly going to cause a property crash ?
Are you buying now?
The resetting rates started in September and will go on for the next 6 months. Things take a while to happen in the property market, unlike the stock market where the crash is instantaneous.
I am really going to enjoy blogging with you over the next 12mths harb:)
harb wrote:Sorry to burst your bubble unmester but the fact is that interest is coming down and we won't see 9% for a very long time. If the crash did not happen with rates going up then there is FA chance of a crash with rates falling. (yes I know, the banks will not pass them on. )Interest rates are on their way down because of legitimate concerns that the credit crunch is flowing through to the "real" economy". A downward cycle is far from an indicator that things are rosey.
Yossarian wrote:Interest rates are on their way down because of legitimate concerns that the credit crunch is flowing through to the "real" economy". A downward cycle is far from an indicator that things are rosey.Indeed. When reserve puts rates up, economy is strong. When a reserve lowers rates, the economy is week.
I just can't see the banks lowerring rates from here till the crisis is over – they have to get their financial power from somewhere. They way I see it is like a landlord rising rents to keep up with rising costs – the banks have to do the same thing. A reserve cut assists the banks with their costs and tries to cancell out a rise for the lender but that all depends on how well the reserve can judge the bank's balance books.
Tysonboss1 wrote:duckster wrote:Rule of 70 . Divide 70 by the growth p/a to find out when investment doubles. So 70 / 7% p/a = 10 years but remember the longer the time period the more the average growth will be 7% p/aI thought it was the rule of 72,…. you divide 72 by the 10% return and it tells you how long it takes to double
It depends on the percentage. 72 is more appropriate when the percentage is around 8%
Here's a table:
% "Rule Of" Number
2 70.01
4 70.69
6 71.37
7 71.71
8 72.05
9 72.39
10 72.73
12 73.40Here's the maths if anyone is interested:
intRate = [int rate]/100
[years to double] = log(2)/log(1+intRate)
[72 rule] = [years to double]*[int rate]S/C
ummester wrote:Are you buying now?I hope so, got 2 offers in and I'm 95% confident they accept it.
Quote:The resetting rates started in September and will go on for the next 6 months. Things take a while to happen in the property market, unlike the stock market where the crash is instantaneous.
Wasn't the turning point in the first quarter of 2008 and September was to be the final straw, or was that something else? How long do you reckon that "while "is in calendar months ? I'd like to mark it up so I know when the market is at it slowest and buy at the bottom .
ummester wrote:I just can't see the banks lowerring rates from here till the crisis is over –Does "from here" includes that month of October or do we start from next month?
Quote:They way I see it is like a landlord rising rents to keep up with rising costs –The way I see it is more like a landlord who lost $1000 at the blackjack table and then puts up the rent to cover his loses. I suspect we'll see RBA drop 0.5% this month and the banks 0.3%
harb wrote:The way I see it is more like a landlord who lost $1000 at the blackjack table and then puts up the rent to cover his loses. I suspect we'll see RBA drop 0.5% this month and the banks 0.3%So why would the banks lower rates if they have losses to cover?
I saw an analyst on the business channel predicting a 0.2 cut from the banks as a political measure in response to an RBA cut of 0.5. The analyst didn't think it would be a good move on the banks behalf, though.
Ok – I may have to about face here. The RBA cut rates by a whole percent (and we aren't even officially in recession) so the banks should be able to allow some cuts through to the mortgage holders – possibly why the RBA did it. I never thought the RBA would cut by that amount, it usually only happens when the country is fully in recession.
And westpac have passed on .8% of the cut. Now i thought they were not going to pass on any cuts
. Dont worry im sure there will be another analyisis and claim that there will be NO OTHER rate cuts after this. Goal post moves again. Ha ha haSeems that way – but you have to wonder why the RBA gave such a big cut?
ummester wrote:Seems that way – but you have to wonder why the RBA gave such a big cut?
Because they know the other central banks are planning to do just that very soon ?
) 
. Dont worry im sure there will be another analyisis and claim that there will be NO OTHER rate cuts after this. Goal post moves again. Ha ha haYou must be logged in to reply to this topic. If you don't have an account, you can register here.
