I tend to agree with the bulls on this one. A good drop in interest rates, (at least 50 points) will stop houses from falling in the short term, and may even effect a small rise. But the effects will be short lived. If the rates drops keep going, the inflationary effects will negate the lower mortgage rate benefits.
Much in the same that QE inflates share prices. It may not be a logical action, but it happens.
What is the crutial factor is the rate that rates drop.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. WARREN E. BUFFETT
I also like that quote, Frank.
But I don't think we've seen any real fear yet. We are starting to see some caution, but not fear. The average person thinks that it's different here or, if not, that the government will save us.
When there is real wide-spread fear (or blood on the streets as they say), then it will be time to re-visit that quote.
I tend to agree with the bulls on this one. A good drop in interest rates, (at least 50 points) will stop houses from falling in the short term, and may even effect a small rise. But the effects will be short lived. If the rates drops keep going, the inflationary effects will negate the lower mortgage rate benefits.
Much in the same that QE inflates share prices. It may not be a logical action, but it happens.
What is the crutial factor is the rate that rates drop.
Will not affect the market at all - absolute twaddle.
The level of unemployment is skyrocketing - not sure which part of that is escaping you. The level of demand for Ore and Coal is dropping.
Employment and economic confidence are the long term determinant factors in buying a house - short term incentive is only for the FOOLS who do not understand the long term reality of purchasing a house.
Even the effect of the FHOG has come home to roost as it has become popular knowledge that it was a ruse.
I tend to agree with the bulls on this one. A good drop in interest rates, (at least 50 points) will stop houses from falling in the short term, and may even effect a small rise. But the effects will be short lived. If the rates drops keep going, the inflationary effects will negate the lower mortgage rate benefits.
Much in the same that QE inflates share prices. It may not be a logical action, but it happens.
What is the crutial factor is the rate that rates drop.
Will not affect the market at all - absolute twaddle.
The level of unemployment is skyrocketing - not sure which part of that is escaping you. The level of demand for Ore and Coal is dropping.
Employment and economic confidence are the long term determinant factors in buying a house - short term incentive is only for the FOOLS who do not understand the long term reality of purchasing a house.
Even the effect of the FHOG has come home to roost as it has become popular knowledge that it was a ruse.
I disagree, it will be good for a few months till the end of June and even then how many people are buying homes in winter? July 1st the Carbon Tax comes in and even at worst the perception of an increased cost of living will negate any rate cut benefits pretty quick. Oh plus the higher cost of filling the tank (over $1.60 last week even before the cut)
A 0.25% rate cut amounts to around $50 saving PER MONTH on the average 300k mortgage. With all the new taxes lately there will be little to boost peoples confidence. After all the storm damage we have had around the country lately you be be assured your insurance premiums will be rising , from your house and contents ,motor insurance , buisiness insurance and why not throw a bit on to your life insurance too. I have heard some house insurance preminums have doubled and even quadtripled, this will need to be spread around a bit. With the carbox tax arriving in two months from tommorow you can look froward to increased costs arising left ,right and centre. If our dollar remains high our manufacturing and exporting will just continue to erode. If our dollar drops our importing and retail will continue to erode faster than it already is.
There are plenty more things I could mention , but with all the increases in costs both now and in the near future people will still end up will less in their pocket. You can also be asssured that after next tuesdays budget people will have less in their pocket again. We are just getting warmed up here
Heard the old sexist joke about how many men it takes to change a light bulb? None … it’s a women’s job. Or was it clean the toilet? No matter, it illustrates a point.
How many rate cuts will it take to boost the property market? None … it’s a confidence job. Yes, falling rates may help to boost confidence but they aren’t the only factor at play.
In days gone by, when everyone was feeling generally happier about their lot, it would have been easy to argue that a cut or two could get people out and buying again, boosting prices and giving a much-needed lift to our residential construction sector.
But burnt by the realisation – in the wake of the global financial crisis – that access to big loans isn't an open chequebook but is instead a heavy burden to bear, it could take more than one or two rate cuts to improve confidence.
Why? Because there’s the worries still hanging around about the global economy, the pain that the two-speed economy is inflicting and the fact the banks have been slyly lifting their rates out of cycle over the past few months, undermining consumers’ confidence that they know where they stand, and that official rate cuts will deliver relief.
Given talk continues about banks' funding costs still being under pressure, despite the clawback that has been happening in recent months, borrowers are still widely expecting that any rate cuts won’t be passed on in full.
“Even if there’s a couple of rate cuts [equalling] 0.75 over the next three months or four months, I don’t think that alone is going to dramatically change the real estate market because economically there’s a lot of factors that have affected the last couple of years of a falling market,” says Sydney real estate agent and auctioneer Ivan Bresic, director of BresicWhitney Estate Agents.
“There are wider economic issues rather than just rate cuts: job losses, lesser bonuses in the finance sector [and] house price drops over the past two years.”
Bresic says he has noticed some recent stabilisation of prices in the areas he sells in – Sydney’s inner city, inner west and east.
He says rate cuts would be a step in the right direction and “will create some mortgage relief for borrowers and if anything, it certainly could entice a few more buyers”.
CommSec chief economist Craig James isn't too sure how big an impact a rate cut could have on the property market.
“That's a difficult one because interest rates are already reasonably attractive,” he says.
“We do know that there’s plenty of bargains out there for cashed-up buyers. But the missing ingredient is basically confidence.
AUDAS, Yer man! Unemployment is great here! You should buy a house or you will miss out! Prices can only go up, supply and demand! Did you even do year 10 economics? That's all you need to know everything about housing.
Translation - hahaha 'population growth will ensure a steady rise or at least no falls.
Oh wait...
Ireland had higher growth than us didn't they? Haha
Can't use that excuse... Hmm how about housing shortage! Under supply!
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