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Be wary about using low interest rates as the catalyst for buying more properties - RBA; Heavily-indebted investors need to be mindful of a slowdown in house price growth
Topic Started: 22 Oct 2014, 08:52 PM (2,221 Views)
Ex BP Golly
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:lol the new normal of outrageously high house prices and outrageously low interest rates :lol

What on earth could go wrong?

DOH!
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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PiratePete1911
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Im really glad that Glenn Stevens himself has decided to come here and give advice.
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Glenn Stevens
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Ex BP Golly
23 Oct 2014, 02:08 PM
:lol the new normal of outrageously high house prices and outrageously low interest rates :lol

What on earth could go wrong?

DOH!
We should never say a crash couldn't happen here, and the Reserve Bank continues to monitor property markets and the performance of mortgages quite closely, as we have for many years. But it has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop – if that's what it is going to do. The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago.
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Ex BP Golly
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PiratePete1911
23 Oct 2014, 02:11 PM
Im really glad that Glenn Stevens himself has decided to come here and give advice.
+1

Im cashing in my equity now maate!
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Blondie girl
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glennstevens
23 Oct 2014, 02:11 PM
We should never say a crash couldn't happen here, and the Reserve Bank continues to monitor property markets and the performance of mortgages quite closely, as we have for many years. But it has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop – if that's what it is going to do. The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago.
Come on... Yes there was some very serious stuff as history proves...
But
The RBA have a naughty habit of chopping those IR once too far or raising once too often... Lol...

Is there really gullible people that believe low IR do reflect a well functioning economy!
It's really bittersweet stuff going on.

People with housing enjoy those low IR, but it troubles the legitimate $ savers .

Lower IR have enabled some people to stampede to buy... the serious question is have some really thought wisely with the easy peasy credit?..overindulged in keeping up with the Jones's? There's really some dummies out there.

Never going to be perfect for some really.

Small shifts in IR make little difference in the overall buy/sell out of housing, if they haven't got the margin , they should not be prop investing.

Someone wins while someone else loses out.....
that's the way it goes.



Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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Prop Cycle
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One of the big benefits of the low IR's is that the repayments have gone right down so a lot of the money have now gone into cash / LOC / equity.

If managed properly these savings will be good ammunition for potential future shocks / future opportunities when the cycle turns.

An investor with 1mil debt would see around $10 - 15k pa of wealth increase just from the difference in IR.
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glennstevens
23 Oct 2014, 02:11 PM
But it has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop – if that's what it is going to do. The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago.
The air compressor used to pump the balloon every so often for the last couple of decades is running out of air though.

Good to see you on the boards, Glenn :)
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Glenn Stevens
23 Oct 2014, 02:11 PM
We should never say a crash couldn't happen here, and the Reserve Bank continues to monitor property markets and the performance of mortgages quite closely, as we have for many years. But it has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop – if that's what it is going to do. The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago.
I would say it has never been more evident than right now.

Western economies decpining six years on with raydz still at zero. Unemployment here recently reaching twelve hear highs, both youth and adult unenemployment now higher than the US,Euro or UK. Our wagez being so high they are cometely uncompetative, hence the 12 year high unemployment. Rates have little room to move down from here. Mining is winding down fast and iron ore prices have crashed 40% this year. We have record overbuilding going on like nothing from the last five years and now many are borrowing more than ever and paying interest only loans.

The collapse of our motor industry and other industries that have supported this country and housing is now closing down forever, where no other GFC effected economy suffered this fate.

On top of that our wages are falling for the first time in history as are all western economies, an historical first.

They are plenty more things I could mention Glen. But let's face the FACTS , the warning signs have never been clearer than now ,yet you can come up with a comment like this.

Some bodies clearly not looking to far ahead or dicardly a lot of reality by making the comment you did above.
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bundy
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Glenn Stevens
23 Oct 2014, 02:11 PM
We should never say a crash couldn't happen here, and the Reserve Bank continues to monitor property markets and the performance of mortgages quite closely, as we have for many years. But it has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop – if that's what it is going to do. The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago.
Oh Glenn.

It's clear you've been managing a property bubble instead of managing an economy.
Edited by bundy, 26 Oct 2014, 01:41 PM.
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Blondie girl
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Prop Cycle
23 Oct 2014, 04:31 PM
One of the big benefits of the low IR's is that the repayments have gone right down so a lot of the money have now gone into cash / LOC / equity.

If managed properly these savings will be good ammunition for potential future shocks / future opportunities when the cycle turns.

An investor with 1mil debt would see around $10 - 15k pa of wealth increase just from the difference in IR.
I agree with what you state.

But there's fools who really haven't planned their strategies wisely.

That never changes.

Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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