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A century of Australian interest rates - mortgage rates are not at historic lows or emergency levels
Topic Started: 8 May 2013, 05:41 PM (14,143 Views)
Trojan
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Enjoy The Ride
8 May 2013, 11:28 PM
I expect Gold will possibly take another leg down to $1150 here it represents great value, if you believe Central Banks and Governments will stop at nothing to produce inflation.
So if house prices fall 40% from peak its called a crash but if gold prices fall 40% from peak, its called great value?
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Enjoy The Ride
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Precisely, housing would be a great investment after a 40% crash assuming the cost of capital is not too high, is this too hard to understand?
Enjoy The Ride!

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zaph
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I think the RBA has not always targeted inflation and was not always independent of government. If so when did the RBA gain independence and when did it start targeting inflation?
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Trojan
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zaph
9 May 2013, 07:52 AM
I think the RBA has not always targeted inflation and was not always independent of government. If so when did the RBA gain independence and when did it start targeting inflation?
RBA became independent and targeted inflation since 1993

You can see the cash rate and inflation rates has been low since then
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Edited by Trojan, 9 May 2013, 02:54 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Dr Watson
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Trojan
9 May 2013, 02:52 PM
RBA became independent and targeted inflation since 1993

You can see the cash rate and inflation rates has been low since then
Yes, the period of independence and inflation targeting is the relevant one. It is clear to all but the wilfully blind that cash rates are at extremely low levels. Take away the punchbowl and see how the property market performs then? They would never have the balls.
Edited by Dr Watson, 9 May 2013, 02:58 PM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Sydneyite
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Dr Watson
9 May 2013, 02:57 PM
Yes, the period of independence and inflation targeting is the relevant one. It is clear to all but the wilfully blind that cash rates are at extremely low levels. Take away the punchbowl and see how the property market performs then? They would never have the balls.
Unsubstantiated supposition on your part. It was only 5 years ago that the cash rate was 250% the current level; how was property doing then??? :dry:
Edited by Sydneyite, 9 May 2013, 04:23 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Dr Watson
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Sydneyite
9 May 2013, 04:21 PM
Unsubstantiated supposition on your part. It was only 5 years ago that the cash rate was 250% the current level; how was property doing then??? :dry:
Property prices and clearance rates fell nationally in response to the RBA's previous cycle of interest rate increases. So the RBA cuts rates, and prices turn around. Coincidence? I doubt it.
Edited by Dr Watson, 9 May 2013, 04:28 PM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Ex BP Golly
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Trojan
9 May 2013, 12:42 AM
So if house prices fall 40% from peak its called a crash but if gold prices fall 40% from peak, its called great value?
I havent found much in the way of houses in the creeks I've been working lately

But good is there for the taking. :D
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Sydneyite
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Dr Watson
9 May 2013, 04:26 PM
Property prices and clearance rates fell nationally in response to the RBA's previous cycle of interest rate increases. So the RBA cuts rates, and prices turn around. Coincidence? I doubt it.
Did they??? So you are claiming clearance rates and prices fell nationally from 2003 through 2007 when the RBA was raising rates the whole time? Are you sure about that? :re:
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Veritas
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Sydneyite
9 May 2013, 04:33 PM
Did they??? So you are claiming clearance rates and prices fell nationally from 2003 through 2007 when the RBA was raising rates the whole time? Are you sure about that? :re:
Im not sure exactly how you have invalidated Watsons point.

All you have said is that prices can rise in spite of interest rate increases. So what?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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