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
Sure it is mops, you keep telling yourself that
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.
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?
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.
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.
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
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.....
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 $9k average figure includes other non-cash flow related deductions like building depreciation and so on. For investors in new builds those can be substantial deductions, meaning they can be cash-flow positive whilst still claiming a significant tax deduction each year.
Yes - moops will be turning everyone into residential house investors if he keeps this line of thinking up.
Any expressed market opinion is my own and is not to be taken as financial advice
Might do. But I wonder how the 1.7 million negative gearers are faring. Plus we have a carbon tax starting soon, plus all the happenings in europe.
As a PI who was marginally negative geared and is now marginally positive geared, who actually has a unit on the market, my response is to raise my price expectation, so my secret bottom line is higher than it was. If I get another 25-50bp in June I will probably take it back off the market, because the business case to keep it is so much stronger. While my circumstances are not prompting me to increase leverage, my incentive to reduce leverage has been considerably reduced.
The other factor of course is that the Aussie has dropped a lot since I listed. My original plan to sell the unit and move the funds into US$-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™
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