Interest rates are now lower because concerted efforts were made to reduce inflation. Until inflation rises significantly, rates are unlikely to be significantly higher.
I agree, I'm just trying to work out why Peter thinks present rates, which most pundits what to drop to a third of the 100 year average, which would then be almost half of the last decades average, are both a "punishment" and "unduly high".
What do you think a fair interest rate should be at the moment Peter?
I think that interest rates have to offer several things. They must give a reward for savers, they must give a margin for lenders so that they can continue to organise our pooled savings and lending (that's what they do really) and they should not be so punitive that our borrowers are forever indebted and business's can't survive.
Plucking figures out of the air, that means from 5.5% to 7.5% in my view. Clearly the RBA need some margin of adjustment to tailor the economy. It's probably fair to say that there have been times when rates were too high, artificially so.
I'm still of the view that when the RBA hike rates to subdue the economy, they are just setting up the right scenario for the next boom, especially if those rates remain high for an extended period. It's probably quite unrealistic to bind the RBA to a fixed range, but a preferred range should be possible at least for the forseeable future.
If we want a steady supply of new housing to meet a steady demand for it, then the prices have to be stable, and the construction industry needs prices that they can budget for. Wild interest rate fluctuations both repress demand and stimulate demand creating a see saw effect in the market. It's either a feast or a famine in housing, and prices adjust accordingly - I don't see the long term benefits to society in this set up. I might be way off the mark, but equally there must be a better way.
Any ideas?
Any expressed market opinion is my own and is not to be taken as financial advice
So Shaddow, what do you think the long term interest rate over the century would be for the average mortgage mug?
I really do like to hear people express their own opinions!
Bond rate returns are not there same thing as mortgage interest rates, but the graph you have kindly provided looks to support my original contention.
Maybe Peter, who knows the market well might like to opine on this question, given the INTEREST it seems to have generated
Shaddow, I wont even ask that the costs, charges and fees for a mortgage be included in these latter years! Not even the ' comparison rates'
Do you still think I am wrong?
timmy
13 Sep 2012, 01:44 PM
bears aren't trying to revive the notion that rates are going up are they? last week china was going to implode, now that iron ore prices have stablised it's interest rates. you bunch of dickheads couldn't predict a fuck in a brothel.
No, we are clearly talking about the past, and the present.
Ps I agree with Peter that interst rates should be from 5.5% - 7%.
But generally they run at 8.5% actual cost to home purchasers.
Would you like to make some judgements on the topic?
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy