Next Interest Rate Movement down?
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I don't think I am alone in thinking something is about to give. Not sure what though....
this.
maybe a relaxation of the FIRB rules will act as stimulus as OS buyers come to the party again
I think the RBA would be pretty pleased where things are at ATM. In spite of low unemployment and inflation pressure from the mining sector, consumers are cautious out if choice, rather than out of a lack of cash. I think they'll sit tight subject to the next one or two inflation results and bask in the elegance of the whole thing.
I still think they've got a slight tightening bias but are pretty comfortable.
BTW, I don't think a drop in rates will help retailers much. The money is there now, people are just being more prudent, which is no bad thing if it creates a steadier economic cycle over the medium term.
I still think they've got a slight tightening bias but are pretty comfortable.
BTW, I don't think a drop in rates will help retailers much. The money is there now, people are just being more prudent, which is no bad thing if it creates a steadier economic cycle over the medium term.
Thanks for the bold. I wasn't listening until then.
You seem to brush rates of but I think they will be more than just a bit of a cushion.
Plus if my memory serves me correct the government said more stimulus would be spent if required even if we went into the red for it.I don't think that will change. Lower rates,stamp duty concessions,home buyer bonuses etc. Right or wrong they will happen again if required.
One economist breaks rank with another 25... and we all think rates are going down.
So do you actually believe house prices will crash then when Jeremy Grantham tells you they will?
So do you actually believe house prices will crash then when Jeremy Grantham tells you they will?
The RBA's threats and scare-mongering has done its job. As well as relying on figures which are lagging, some qualitative contribution also plays a role............... I think the prudent (saving) sentiment on the street that TF describes above is out of choice. Dropping 25 points issn't suddenly going to fill the coffers of David Jones.
Whether we get one up or one down, things will track sideways unless Euro-zone implodes or some new derivative fiasco is born in the US. We are not out of the woods and it is not yipee kayay. If we have one full percent less in one year, whilst my personall profit and loss will be appreciative, I do not think it bodes well for the inflation it will cause to house prices again........then we will have a bubble guaranteed.
The first Tuesday isn't as important in August for us this time around as early August is in the US when they shall all say "I" to extend the deadline and debt ceiling for their debt obligations. The printing presses will need to crank up a few gears so they can work their alchemy (money out of thin air).
No matter, it serves all of us to be mindful of having conservative LVR's (different for each persons situation) just in case.................
Whether we get one up or one down, things will track sideways unless Euro-zone implodes or some new derivative fiasco is born in the US. We are not out of the woods and it is not yipee kayay. If we have one full percent less in one year, whilst my personall profit and loss will be appreciative, I do not think it bodes well for the inflation it will cause to house prices again........then we will have a bubble guaranteed.
The first Tuesday isn't as important in August for us this time around as early August is in the US when they shall all say "I" to extend the deadline and debt ceiling for their debt obligations. The printing presses will need to crank up a few gears so they can work their alchemy (money out of thin air).
No matter, it serves all of us to be mindful of having conservative LVR's (different for each persons situation) just in case.................
I'll bet they are grinding teeth at the moment.
I say Oct....looks like a great month for a drop. Sept/Oct is when investors gets really nervous.
I have left all my rates variable and I/O....looking forward to fix my rates when they near high fives or low sixes for 2-3 fixed rates.
Lets see how long some naysayer it won't get this low??
I say Oct....looks like a great month for a drop. Sept/Oct is when investors gets really nervous.
I have left all my rates variable and I/O....looking forward to fix my rates when they near high fives or low sixes for 2-3 fixed rates.
Lets see how long some naysayer it won't get this low??
I'll admit it is possible that the next movement will be down in rates. However this will depend on GFC 2 happening. If things stay that same as they are at the moment I expect the next move will be up or remain the same for a long time.
The inflation pressures are still there and as soon as rates go down in this market, expect another house price mini boom (assuming things stay the same). I don't expect the RBA to go down unless there are issues with the mining industry. THen we are stuffed.
The inflation pressures are still there and as soon as rates go down in this market, expect another house price mini boom (assuming things stay the same). I don't expect the RBA to go down unless there are issues with the mining industry. THen we are stuffed.
Another interesting anecdote to add to this discussion;
I know a builder who will be closing his doors at the end of this year...for good.
reasons - can only get 70% project lending from Banks in current lending environment.
May be self inflicted? He didn't let on if so.
With him will go 60 jobs. These will probably get absorbed, but maybe not.
Watch the Sept quarter retail figures - will be horrible, then watch Dec quarter retail figures as well (fair way off I know).
I know a builder who will be closing his doors at the end of this year...for good.
reasons - can only get 70% project lending from Banks in current lending environment.
May be self inflicted? He didn't let on if so.
With him will go 60 jobs. These will probably get absorbed, but maybe not.
Watch the Sept quarter retail figures - will be horrible, then watch Dec quarter retail figures as well (fair way off I know).
I agree completely Bayview. Now banks require presales to cover all construction peak debt, will only lend 80% of hard costs, and they basically don't allow any pre-sales to overseas investors. This place is stuffed!
What a nice little niche that would be if someone could only take advantage of it.
Oh....wait.....!
Chairman Rudd to the rescue? Is he a chance at Labour leadership again?
Well here we go.....3 year fixed rates are baing adjusted as we speak...
http://www.smh.com.au/business/banks-cut-fixedrate-mortgages-20110718-1hl3l.html
I good sign that the next movement is now down....banks don't reduced fixed rates unless their are pretty sure.
So:
1. Newspapers and RBA openly discussing a move down - TICK
2. 2 and 3 year rates being reduced - TICK
All we need now is bad numbers for employment, retail, housing starts, and GDP growth in July and August for a rate cut in October. They move earlier if the numbers are really bad.
Oh...incidently has anyone noticed apart from bananas....price of food is now start to drop again. Well it is cheaper than the last 12-18 months. Another sign....also rents are now also moving a lot slower (except Sydney properties less than 500pw or less)
http://www.smh.com.au/business/banks-cut-fixedrate-mortgages-20110718-1hl3l.html
I good sign that the next movement is now down....banks don't reduced fixed rates unless their are pretty sure.
So:
1. Newspapers and RBA openly discussing a move down - TICK
2. 2 and 3 year rates being reduced - TICK
All we need now is bad numbers for employment, retail, housing starts, and GDP growth in July and August for a rate cut in October. They move earlier if the numbers are really bad.
Oh...incidently has anyone noticed apart from bananas....price of food is now start to drop again. Well it is cheaper than the last 12-18 months. Another sign....also rents are now also moving a lot slower (except Sydney properties less than 500pw or less)
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I copped a bit of a bagging for suggesting the next interest rate movement might be down also (but some months ago now).
My thinking at this time is that interest rates are likely to stay where they are for a while, but that they may drop a bit over the next couple of years. I think the RBA will try to keep rates as stable as possible, so they have the ability to drop rates if the poo really hits the fan.
I think we have some rocky times ahead, but I don't think we're going to have the financial disaster some are predicting. I guess I'm kinda middle of the road on this one.
My thinking at this time is that interest rates are likely to stay where they are for a while, but that they may drop a bit over the next couple of years. I think the RBA will try to keep rates as stable as possible, so they have the ability to drop rates if the poo really hits the fan.
I think we have some rocky times ahead, but I don't think we're going to have the financial disaster some are predicting. I guess I'm kinda middle of the road on this one.
July 27th are the next release dates for June CPI figures. More clues after this.
Inflation was at 5% last time the RBA started slashing interest rates.
Rates are only going one direction, and that is UP. Inflation is a problem globally, and most central banks are raising rates (even in areas that are economically messed up).
All this talk from Somersofters (and Westpac) about rates heading down is rubbish. Westpac just purely hopes for a kick up in consumer confidence with the talk of rates down 1%.
At least Michael Pascoe is correct on his analysis here.
Rates going down? Think again
Interest rates still on way up, economists says after RBA meeting
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