Are we on the cusp of an upswing for property?

[bluestorm]

It's all just short term competition to gain market share. Rates will rise overall this year however, impacting on property (as other cost of living factors also leave people with less disposible income).

I'll take it from the horse mouth.
11 Apr 2011- RBA to raise rates 'around' September: Westpac CEO Gail Kelly

“Possibly around September-time I would see the potential for another interest rate change, but I think that will be 25 basis points up.”
At a later doorstop interview, Mrs Kelly said average funding costs continued to rise, but she declined to comment on whether Westpac would respond with an out-of-cycle rate rise.

Keep dreaming about your rate cut boys.

 

[Deltaberry]

Lol why you so angry?

 

[BV]

Keep dreaming about your rate cut boys.

0.5% would be good for the economy

 

[The Fence]

Was only a few weeks ago that I saw Kelly on TV flagging a rate cut by the banks as funding costs were easing.

Changed her tune in a matter of weeks...?

CBA's aggressive stance in retaining customers of late has amounted to up to 0.25% in cuts, basically giving back the double up they put on at last RBA rate rise.

 

[topcropper]

Okay point taken. So why are food prices in Australia are among the highest in the world?

Ready to be edmucated. ?

The strength of the aussie dollar is a big reason.

10 years ago if you went to London, you thought their food was expensive compared to ours, and it was as our dollar didn't buy much. But now with the commodities boom, Australia is rolling in cash, but the Poms economy is in strife. Their pound doesn't buy anywhere near what it used to, but our dollar buys a lot more.

It appears to an Aussie that food prices are cheap in London today. It is, because our currency buys a lot more. But ask a Pom if food is cheap? I bet they don't notice any difference.

Remember the Japanese coming here 20 years ago to play golf? It was cheaper to fly to Cairns and stay for a week and play golf, than to play golf in Japan. Not so now, I'll wager.



I'll bet that food costs per family, as a ratio to wages would still be as cheap as anywhere else in the world. That's the important point.

Also....I am sick of paying $10-$12 per Kg for bananas...I appreciate the cyclone hit the industry.....but $10-$12 kg for bananas?? Common?? Coffs did not take a hit did it?

There are disease issues regarding importing bananas. So they aren't imported. And banana production has moved north as land prices are much cheaper and flat land is frost free in far north QLD, meaning easier production compared to climbing around a mountainside as you have to do in southern banana growing areas to get frost free. And then a lot of the mountainside banana farms at Coffs with ocean views were all of a sudden worth 10 million dollars to a developer, so they're all covered in housing now. So now cyclones wipe the crop out up north.


See ya's.

 

[arriety]

The strength of the aussie dollar is a big reason.

There are disease issues regarding importing bananas. So they aren't imported. And banana production has moved north as land prices are much cheaper and flat land is frost free in far north QLD, meaning easier production compared to climbing around a mountainside as you have to do in southern banana growing areas to get frost free. And then a lot of the mountainside banana farms at Coffs with ocean views were all of a sudden worth 10 million dollars to a developer, so they're all covered in housing now. So now cyclones wipe the crop out up north.


See ya's.

Thanks for explaining about the banana! Also I agree about the strength of dollar having an effect. We don't really know what is long term effect if we are the strongest economy compared to UK or USA (we can't compete with China/India.) Although in terms of population numbers we are pretty insignificant so not sure if we can have much of an effect even with our comodities. I don't think the banks know what the high $AU dollar means in long term so are hedging their bets either way. The market will probably be flat over winter and then we'll see. A lot can happen in 3 months.

 

[eeew]

It's all just short term competition to gain market share. Rates will rise overall this year however, impacting on property (as other cost of living factors also leave people with less disposible income).

I'll take it from the horse mouth.
11 Apr 2011- RBA to raise rates 'around' September: Westpac CEO Gail Kelly




Keep dreaming about your rate cut boys.

I mostly agree here. All this talk about rate cuts and so forth are mostly marketing/pr short term plans to gain customers. If rates are cut, rest assured, they wont be cut anywhere near what the banks increased it in november of last year.
Id say we need a near recession for the banks to cut by anything more than 35 basis points or more. That is highly unlikely given that we are essentially underwritten by china and india.

 

[Token Funder]

Was only a few weeks ago that I saw Kelly on TV flagging a rate cut by the banks as funding costs were easing.

Changed her tune in a matter of weeks...?

CBA's aggressive stance in retaining customers of late has amounted to up to 0.25% in cuts, basically giving back the double up they put on at last RBA rate rise.

Gail was talking about reductions in funding margins medium term as some of the crazy funding costs incurred post 2007 are replaced by less crazy ones. However, this is quite different to the overall rate position as, if banking funding margins dropped in a year or so but the RBA still saw the need for a slightly restrictive setting, they would pull their levers to ensure customer rates were in their preferred band.

 

[Ausprop]

The strength of the aussie dollar is a big reason.

this argument is a bit of a stretch TC. In essence you are saying the high cost of food is only comparative and are blaming the high dollar for that illusion. however a weaker dollar would see food prices escalate dramatically.

 

[topcropper]

this argument is a bit of a stretch TC. In essence you are saying the high cost of food is only comparative and are blaming the high dollar for that illusion. however a weaker dollar would see food prices escalate dramatically.

Yeah, I can see your point, and it makes sense. A high dollar should make food prices cheaper.

Yep, I suppose it is an illusion when you are overseas. It does appear that now food is cheaper in London today, and Tokyo, and Paris than here, but 10 years ago it was more expensive.

As in my point before, I'll bet the residents of London and Tokyo and Paris can't see the cheaper foods though, because it is an illusion that only an Aussie can see when they are overseas now caused by our more valuable dollar.



Buggered if I know. Why is food so flippen cheap in the US? California is a major fruit and vege producer, so perhaps it's due to illegal mexicans working for $4 an hour? But still, wages are less over there, so maybe the food to wages ratio is similar to here?



A high dollar is supposed to mean exporters suffer. However, historically commodity exporters haven't, as a high dollar means high commodity prices. Grain and plenty of other food prices have always had a better return to the farmer when there is a high dollar. And when the aussie dollar was worth 55 cents I can remember some very hard times. It's a paradox.


See ya's.

 

[Token Funder]

Yeah, I can see your point, and it makes sense. A high dollar should make food prices cheaper.

Yep, I suppose it is an illusion when you are overseas. It does appear that now food is cheaper in London today, and Tokyo, and Paris than here, but 10 years ago it was more expensive.

As in my point before, I'll bet the residents of London and Tokyo and Paris can't see the cheaper foods though, because it is an illusion that only an Aussie can see when they are overseas now caused by our more valuable dollar.



Buggered if I know. Why is food so flippen cheap in the US? California is a major fruit and vege producer, so perhaps it's due to illegal mexicans working for $4 an hour? But still, wages are less over there, so maybe the food to wages ratio is similar to here?



A high dollar is supposed to mean exporters suffer. However, historically commodity exporters haven't, as a high dollar means high commodity prices. Grain and plenty of other food prices have always had a better return to the farmer when there is a high dollar. And when the aussie dollar was worth 55 cents I can remember some very hard times. It's a paradox.


See ya's.

Cheap immigrant labour makes the US go 'round, particularly on the West Coast and the South East. For the rest, scale and subsidies are a big help.

 

[tom32]

It's a paradox.

The strangest thing is; around seafood we cannot even afford to buy our own...

We have to settle for Vietnamese Catfish and at best NZ produce because the Australian stuff is bought for more OS.

You would have thought with the dollar at 1.05 we would be able to afford some of our own lobsters?

Also how can I buy WA lobster in Dubai cheaper than I can buy it in Australia, then am told we just don't pay enough for it here???

There are certainly some strange things that seem to happen between the farmgate (fishing boat in this case) and the consumer in this country...

 

[sash]

Well put.....wow WA lobster cheaper in Dubai???

I smell a rat.....supports my thinking that Australia is rip off capital of the world. We might get paid well....but can't afford to live in our own country.

The strangest thing is; around seafood we cannot even afford to buy our own...

We have to settle for Vietnamese Catfish and at best NZ produce because the Australian stuff is bought for more OS.

You would have thought with the dollar at 1.05 we would be able to afford some of our own lobsters?

Also how can I buy WA lobster in Dubai cheaper than I can buy it in Australia, then am told we just don't pay enough for it here???

There are certainly some strange things that seem to happen between the farmgate (fishing boat in this case) and the consumer in this country...

 

[eeew]

Well put.....wow WA lobster cheaper in Dubai???

I smell a rat.....supports my thinking that Australia is rip off capital of the world. We might get paid well....but can't afford to live in our own country.

So what about the ones that dont get paid well. I am lucky because i do, but know a lot that dont.

 

[tom32]

So what about the ones that dont get paid well. I am lucky because i do, but know a lot that dont.

Don't worry for them due to government red tape, regulation around labour, our ridiculously expensive workers compensation schemes esp in NSW and finally actually taxes on employing people like payroll tax; they still cost companies plenty per hour so anything business actually does with them costs the consuming public plenty.

 

[Aaron Sice]

we can't afford our lobster because the restaraunts have a 200% markup.

 

[Giddyup]

The strangest thing is; around seafood we cannot even afford to buy our own...

Have you tried buying red meat lately? Seafood almost looks cheap in comparison.

I could buy New Zealand lamb racks cheaper in the UK, than what I could buy Aussie lamb in Australia!

Something is very wrong when that happens.

 

[Aaron Sice]

Have you tried buying red meat lately? Seafood almost looks cheap in comparison.

I could buy New Zealand lamb racks cheaper in the UK, than what I could buy Aussie lamb in Australia!

Something is very wrong when that happens.

it's called "the great australian markup".

 

[tom32]

Have you tried buying red meat lately? Seafood almost looks cheap in comparison.

I could buy New Zealand lamb racks cheaper in the UK, than what I could buy Aussie lamb in Australia!

Something is very wrong when that happens.

At least you live in Melbourne.

You have that wholesale butcher near Mordialloc, I think it was called Braeside Meats? The missus used to buy meat there. Rump etc typically $15.00 per kg for quality.

Now I am in Perth the only way to get value is to buy whole sides of meat.

Having lived in Melbourne and now Perth your fresh veg and meat is pretty good value.

Perth unfortunately is similar to Brisbane. Generally Hyundai quality with Rolls Royce prices. I reckon to extend the analogy Melbourne is Hyundai quality with Toyota prices.

 

[HiEquity]

Could be a timing issue there...

On farm cross bred lamb prices have been over $140 per head in WA recently - all part of the soft commodity "boom". Certainly an awful lot higher than a few years ago...

A lot of WA Wheatbelt farmers are rediscovering the benefits of running both sheep and crop after over a decade of no-one making any worthwhile money on sheep.