And this in the media today...
Euro investors eye local property market
Nice... Some low rate competition for the big 4.
The risk of course, is that cheap rates will result in a genuine property bubble. That's alluded to at the end...
i.e. That flood of capital with lowered lending standards resulting in an asset bubble. If this does happen then ride the wave for as long as you dare but be aware of the potential medium term impact when it washes out.
As an investor, not a speculator, I'd rather rates remained higher to stave off any speculative investment with poor lending standards. Current prices are very sustainable. But a true bubble which could eventuate if we're flooded with cheap offshore capital would mean longer term heartache for some who aren't in already or lever up through the bubble. Some offshore competition would be good but not if it resulted in a significant drop in lending standards.
Still, a rapid doubling in prices from today would be nice...
Cheers,
Michael
Euro investors eye local property market
SMH said:European investors are lining up to plough money into Australian mortgage securities as the strength of the local housing market attracts international attention.
Non-bank lender FirstMac said European fund managers want the federal government to consider supporting euro-dominated investment into local mortgage backed securities.
Nice... Some low rate competition for the big 4.
The risk of course, is that cheap rates will result in a genuine property bubble. That's alluded to at the end...
SMH said:''The process by which this can happen typically starts with a country, for one or more reasons, becoming attractive to foreign investors,'' said RBA deputy governor Ric Battellino. The country then allows in a flood of capital that overwhelms the capacity of the economy to use it productively, he said.
''This type of crisis can occur even in highly sophisticated economies, as illustrated by the recent subprime crisis in the United States.''
i.e. That flood of capital with lowered lending standards resulting in an asset bubble. If this does happen then ride the wave for as long as you dare but be aware of the potential medium term impact when it washes out.
As an investor, not a speculator, I'd rather rates remained higher to stave off any speculative investment with poor lending standards. Current prices are very sustainable. But a true bubble which could eventuate if we're flooded with cheap offshore capital would mean longer term heartache for some who aren't in already or lever up through the bubble. Some offshore competition would be good but not if it resulted in a significant drop in lending standards.
Still, a rapid doubling in prices from today would be nice...
Cheers,
Michael