Good and bad news!!

[McKlusky]

The good news is that interest rates look stable, the bad news is that prices have slumped meaning lower portfolio values. Im not sure about the statement that prices have risen in other capital cities outside of Melb & Syd. Anecdotally they seem to have fallen but to lesser degree.


http://www.smh.com.au/articles/2004/07/15/1089694491569.html?oneclick=true

[Mark_B]

Does anyone else sense confusion here?




Debt level could bring rate rise (http://www.somersoft.com/forums/showthread.php?t=16589)
By Matt Wade
July 10, 2004 SMH

Home borrowing is retracting, but not fast enough to silence talk of higher interest rates.


HSBC senior economist Anthony Thompson said yesterday lending figures suggested rate rises were in the pipeline.

Commonwealth Bank chief economist Michael Blythe said the lending level was [still] too high for the Reserve Bank's liking.


Proof of a half-year property slump (http://www.smh.com.au/articles/2004/07/15/1089694491569.html?oneclick=true)
By John Garnaut
July 16, 2004

The Reserve Bank has confirmed Sydney house and apartment prices fell over the first half of this year, paving the way for stable interest rates until the federal election.

Adam Donaldson, a senior economist at UBS, said the Reserve Bank had confirmed his view that rates would remain unchanged into next year, because house prices were the main influence on interest rate movements.

"We take that to mean there's very little chance of them raising interest rates in the near term," he said.




If anybody has learned anything from reading this forum, I would hope that it is never trust an economist when they are talking economics.




So what has the RBA done in the past in the lead up to an election?



The last Federal elections have been held on:

26 November 2001 - Howard re-elected

Between February and October 2001 the RBA reduced interest rates 5 times from 6.25% to 4.5%. In December 2001 rates fell again to 4.25%.

21 October 1998 - Howard re- elected

There were no interest rate movements in the 13 months leading up to the election. The next interest rate movement after the election was a 25 basis points cut to 4.75% - 6 weeks after the election.

11 March 1996 - Howard elected

Interest rates did not move between December 1994 until July 1996.

The man who oversaw the "recession we had to have" left office with the cash rate at 7.50% - a far cry from the 17% it once was under his stewardship (and no that is not a compliment).

24 March 1993 - Keating re-elected

Interest rates did not move from July 1992 until March 1993 and then, a day before election day, fell 50 basis points to 5.25%. Dr Hewson never stood a chance.

4 April 1990 - Hawke re-elected

Interest rates fell 1 - 1.50% on 4 April 1990 (to between 15 - 15.50%)

References:

RBA (http://www.rba.gov.au/Statistics/cashrate_target.html)

Australian Parliamentary Handbook (http://www.aph.gov.au/library/handbook/historical/ministries/index.htm)


MB

[Aceyducey]

Gee - no-one seems to have told the buyers in most of the areas my properties are in :)

McKlusky, I'd actually prefer interest rates up another 0.5-1.0 percent....to help get rid of all the marginal investors & create some more bargains in the market.

So I don't consider flat rates as good news.

Are you personally in the market right now, or just tyre-kicking?

Cheers,

Aceyducey

[McKlusky]

Aceyducey, Stable interest rates might not turn you on but im sure other people are glad, especially those that are neg. geared or just doing it tough financially.

Im out of the property market right now,waiting a couple of years to come back in but keeping a keen eye on things.

[XBenX]

Interesting times ahead - nice post MB =)

Does anyone else sense confusion here?





Proof of a half-year property slump (http://www.smh.com.au/articles/2004/07/15/1089694491569.html?oneclick=true)
By John Garnaut
July 16, 2004

The Reserve Bank has confirmed Sydney house and apartment prices fell over the first half of this year, paving the way for stable interest rates until the federal election.

Adam Donaldson, a senior economist at UBS, said the Reserve Bank had confirmed his view that rates would remain unchanged into next year, because house prices were the main influence on interest rate movements.

"We take that to mean there's very little chance of them raising interest rates in the near term," he said.




If anybody has learned anything from reading this forum, I would hope that it is never trust an economist when they are talking economics.




So what has the RBA done in the past in the lead up to an election?



The last Federal elections have been held on:

26 November 2001 - Howard re-elected

Between February and October 2001 the RBA reduced interest rates 5 times from 6.25% to 4.5%. In December 2001 rates fell again to 4.25%.

21 October 1998 - Howard re- elected

There were no interest rate movements in the 13 months leading up to the election. The next interest rate movement after the election was a 25 basis points cut to 4.75% - 6 weeks after the election.

11 March 1996 - Howard elected

Interest rates did not move between December 1994 until July 1996.

The man who oversaw the "recession we had to have" left office with the cash rate at 7.50% - a far cry from the 17% it once was under his stewardship (and no that is not a compliment).

24 March 1993 - Keating re-elected

Interest rates did not move from July 1992 until March 1993 and then, a day before election day, fell 50 basis points to 5.25%. Dr Hewson never stood a chance.

4 April 1990 - Hawke re-elected

Interest rates fell 1 - 1.50% on 4 April 1990 (to between 15 - 15.50%)

References:

RBA (http://www.rba.gov.au/Statistics/cashrate_target.html)

Australian Parliamentary Handbook (http://www.aph.gov.au/library/handbook/historical/ministries/index.htm)


MB

[Jase]

Well from what I have seen prices looked like they either fell a bit or flattened out across most of Brisbane sectors thru the months of Feb/March/April but some areas at least (like my suburb of Bardon) seem to have a second spurt on from May & June onwards.. will be interesting to see if this trend continues or if just a bit of lost ground is being reclaimed (so to speak hehe).

Can't speak for other cities though.
Cheers

Jase.