Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 2
  • 6
Interest rate cuts don't do nothing; May rate cut failing to stimulate mortgage demand: Loan Market
Topic Started: 25 May 2012, 02:57 PM (4,556 Views)
themoops
Member Avatar
Ruby Member
Frank Castle
25 May 2012, 03:28 PM
How could I possibly be lying?

Interest rates dropping mean repayments are less
That means more cash in my (and anyone with a loans) pocket.
Thats a fact

Rents are rising meaning more cash in my pocket
is also a documented fact

You are seriously delusional if you think otherwise :wak:



Sure it is mops, you keep telling yourself that :wak:


And I ask again, how has the dropping interest rates helped your savings? ;)
Because you're you.

It doesn't matter if twats like you have a couple of extra dollars, what matters is deleveraging is gathering even more momentum even after a hefty rate cut. Idiot.
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
Profile "REPLY WITH QUOTE" Go to top
 
Sherlock
Member Avatar


Quote:
 
5% increase in loan enquiries to date in May compared with April
Those IR cuts, happened only 3 weeks ago -- enquiries jumped 5 percent already!!

What do you expect in 3 weeks??
Profile "REPLY WITH QUOTE" Go to top
 
Sydneyite
Member Avatar


Sherlock
25 May 2012, 03:36 PM
Those IR cuts, happened only 3 weeks ago -- enquiries jumped 5 percent already!!

What do you expect in 3 weeks??
And actual interest rate cuts from the banks only came into effect 1 week ago! :dry:

PS: It's generally accepted that monetary policy setting changes take 6-12 months to have their desired / expected impact on the economy.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Profile "REPLY WITH QUOTE" Go to top
 
NotFooled
Member Avatar
The Bear Whisperer

themoops
25 May 2012, 03:17 PM
Big deal about your pissy anecdote, which you're probably lying about anyway. The fact is the crash is gathering momentum.
These comments scream of desperation and denial. Moops is waking up to the fact that he won't be able to afford the house he so intensely believes he deserves.

Like Craig Thompson, is Moops being pushed to the edge as his world unravels around him?
Profile "REPLY WITH QUOTE" Go to top
 
themoops
Member Avatar
Ruby Member
NotFooled
25 May 2012, 04:04 PM
These comments scream of desperation and denial. Moops is waking up to the fact that he won't be able to afford the house he so intensely believes he deserves.

Like Craig Thompson, is Moops being pushed to the edge as his world unravels around him?
I'll be fine crash or no crash.

Vested interests like yourself are shitting yourselves.
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
Profile "REPLY WITH QUOTE" Go to top
 
stinkbug
Member Avatar


themoops
25 May 2012, 03:10 PM
People are still deleveraging instead of propping up the ponzi, fool.
Yes, and it's good news. If this is the extent of the property crash, I'll be quite happy. Someone here (I think it was GenX) posted recently the level to which deleveraging had occurred in Australia over the past couple of years, and it was substantial. Throw in the current employment numbers and falling interest rates and it's hard to see anything other than a steady, orderly softening over several years until we have the next big step up.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


themoops
25 May 2012, 03:30 PM
peter fraser
25 May 2012, 03:23 PM
I agree with the first part of your post, people are not racing out to buy houses, so that should reduce the price of houses.

However, the lower that rates go, the less pressure there is on financially distressed households, and that will save a lot of people, thus meaning less distressed sellers, and that will slow the falls in house prices.

And lastly - if rates fall sufficiently, eventually more buyers will be drawn out as repayments equal rents. Especially if they can lock those rates in for a few years. CBA is now 5.7% fixed.

So it's a mixed bag - some bearish, some bullish. That's life...
Might do. But I wonder how the 1.7 million negative gearers are faring. Plus we have a carbon tax starting soon, plus all the happenings in europe.
moops - why would it worry the negative gearers, and do you know how many previously negative gearers have now turned positive.

The greatest cost for a IP owner is usually the interest cost on the loan. If you drop the rate down from 7.5% to 5.5% then that 2% fall represents a discount of 26.7%. If rates fall to 5.0% the that is a saving of 33% and that is massive.

On a loan of $500,000 that will be over $1000 per month. I think there was an article lately that stated that the average IP ran at a loss of $9000 pa, so most are already positive again.

Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
Sydneyite
Member Avatar


peter fraser
25 May 2012, 04:22 PM
moops - why would it worry the negative gearers, and do you know how many previously negative gearers have now turned positive.

The greatest cost for a IP owner is usually the interest cost on the loan. If you drop the rate down from 7.5% to 5.5% then that 2% fall represents a discount of 26.7%. If rates fall to 5.0% the that is a saving of 33% and that is massive.

On a loan of $500,000 that will be over $1000 per month. I think there was an article lately that stated that the average IP ran at a loss of $9000 pa, so most are already positive again.
And remember that $9k average figure includes other non-cash flow related deductions like building depreciation and so on. For investors in new builds those can be substantial deductions, meaning they can be cash-flow positive whilst still claiming a significant tax deduction each year.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


Sydneyite
25 May 2012, 04:55 PM
peter fraser
25 May 2012, 04:22 PM
moops - why would it worry the negative gearers, and do you know how many previously negative gearers have now turned positive.

The greatest cost for a IP owner is usually the interest cost on the loan. If you drop the rate down from 7.5% to 5.5% then that 2% fall represents a discount of 26.7%. If rates fall to 5.0% the that is a saving of 33% and that is massive.

On a loan of $500,000 that will be over $1000 per month. I think there was an article lately that stated that the average IP ran at a loss of $9000 pa, so most are already positive again.
And remember that $9k average figure includes other non-cash flow related deductions like building depreciation and so on. For investors in new builds those can be substantial deductions, meaning they can be cash-flow positive whilst still claiming a significant tax deduction each year.
Yes - moops will be turning everyone into residential house investors if he keeps this line of thinking up.



Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


themoops
25 May 2012, 03:30 PM
Might do. But I wonder how the 1.7 million negative gearers are faring. Plus we have a carbon tax starting soon, plus all the happenings in europe.
As a PI who was marginally negative geared and is now marginally positive geared, who actually has a unit on the market, my response is to raise my price expectation, so my secret bottom line is higher than it was. If I get another 25-50bp in June I will probably take it back off the market, because the business case to keep it is so much stronger. While my circumstances are not prompting me to increase leverage, my incentive to reduce leverage has been considerably reduced.

The other factor of course is that the Aussie has dropped a lot since I listed. My original plan to sell the unit and move the funds into US$-denominated assets just went halfway down the toilet and it is harder for me to make better use of the money tied up in the unit. That drop is partly due to the interest-rate cut.

In the suburbs I watch, there has been a marginal reduction in the number of units listed, and the percentage with "under contract" in their listing has gone up hugely in one of the suburbs over the past 2-3 weeks.

So while the interest rate cut certainly hasn't created a frenzy, it's effect is still somewhat bullish.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 2
  • 6



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.

For more information go to Limitations on Exclusive Rights: Fair Use

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