Ho Hum - Interest Rate Rises
- Thread starter Bill.L
- Start date
Hi Ausprop,
What I meant by complacency was that no-one here even bothered to start a thread about would they/wouldn't they raise interest rates. Plus in the first hour after the announcement, there is only this tread mentioning the rise.
Mostly appears business as usual, hence the Ho-Hum part of the title of this thread.
Just as a comparison to the mid '80's, interest rates went from 14-15% to 18% when it all fell to pieces. That was an increase in interest costs of 28.5%.
Since mid 2002 we have had 8 rises, from 6% to 8%, this is an increase in interest costs of 33%.
Yet there appears to be complacency amongst investors about this.
bye
What I meant by complacency was that no-one here even bothered to start a thread about would they/wouldn't they raise interest rates. Plus in the first hour after the announcement, there is only this tread mentioning the rise.
Mostly appears business as usual, hence the Ho-Hum part of the title of this thread.
Just as a comparison to the mid '80's, interest rates went from 14-15% to 18% when it all fell to pieces. That was an increase in interest costs of 28.5%.
Since mid 2002 we have had 8 rises, from 6% to 8%, this is an increase in interest costs of 33%.
Yet there appears to be complacency amongst investors about this.
bye
Wasn't like it was a surprise. The market has priced it in as a certainty for at least the last couple of days.
I know I'm negative gearing with half my loans variable. If the market falls, fine. I'll just refinance to buy more. If that isn't investing, that's cool too. Who cares what people call it as long as it achieves my goals.
Alex
I know I'm negative gearing with half my loans variable. If the market falls, fine. I'll just refinance to buy more. If that isn't investing, that's cool too. Who cares what people call it as long as it achieves my goals.
Alex
huge question - perhaps consider how it won't affect you? times are choppy now, we aint seen nothing yet. let's all be thankful that we are lucky enough to have been born in a big dusty country full of minerals, could be our only saving grace from here.
I get your point but why would you continue neg gearing with interest rates rising and uncertain growth in property prices going forward.
How many low yielding properties can you service with the thought in the back of your mind that you probably will not have the cap. growth to compensate for your increasing outgoings?
We are very close (which side of the peak we are sitting on i'm not sure) to the top of an economic curve atm. Agree?
http://www.news.com.au/dailytelegraph/story/0,22049,22717496-5014099,00.html
How many low yielding properties can you service with the thought in the back of your mind that you probably will not have the cap. growth to compensate for your increasing outgoings?
We are very close (which side of the peak we are sitting on i'm not sure) to the top of an economic curve atm. Agree?
http://www.news.com.au/dailytelegraph/story/0,22049,22717496-5014099,00.html
interest rise
Boy if interest climbs over 10% some of us will B in trouble including me.
Geoff
Boy if interest climbs over 10% some of us will B in trouble including me.
Geoff
True! It has been a rewarding place to invest for years now and will continue to be so in future. Don't be a spectator. Fortune does indeed favour the bold.
Complacency? It's not like we can get any results by starting a picket line to bring interest rates down. We just have to grin and bear it. 
What do you mean, interest rates have been the 'hot topic' here over the last few weeks?!
http://www.somersoft.com/forums/showthread.php?t=36851
http://www.somersoft.com/forums/showthread.php?t=36873
http://www.somersoft.com/forums/showthread.php?t=37013
http://www.somersoft.com/forums/showthread.php?t=36921
http://www.somersoft.com/forums/showthread.php?t=36886
http://www.somersoft.com/forums/showthread.php?t=36719
http://www.somersoft.com/forums/showthread.php?t=36846
This is just on Somersoft, there's more at PI.com, invested.com.au and GHPC.com...!
We have $1M fixed for another 18 months. If rates are really high when we come off the fixed period, we will have to consider our position.
We are negatively geared but capital growth has been good to us. I just think that if things get really bad, we sell a house.
I would try to hold on as long as possible, but the beauty of having invested over many years is that we have an option of selling one house and not being on the street.
If people are struggling with only their PPOR, then I fear for them.
Wylie
We are negatively geared but capital growth has been good to us. I just think that if things get really bad, we sell a house.
I would try to hold on as long as possible, but the beauty of having invested over many years is that we have an option of selling one house and not being on the street.
If people are struggling with only their PPOR, then I fear for them.
Wylie
Everyone knew it was coming, so no shock today that is has happened.
Interest rate rises won't bug me for the next 5 yrs. As far as new loans - well that's why you work things out on paper before committing.
You also know when your loan fixes are due to expire, and if necessary can take appropriate action before hand.
Interest rate rises won't bug me for the next 5 yrs. As far as new loans - well that's why you work things out on paper before committing.
You also know when your loan fixes are due to expire, and if necessary can take appropriate action before hand.
I thought the more important question was as to when interest rates would start to fall, and hence the time period in which to fix rates today, eg. 1, 2, 3 years etc...A bit of guesswork involved here though, but I've fixed half my loans for 2 years.
For the more seasoned investors - when rates fall, do they fall in .25% increments ?
I guess the difference with last time was that business held most of the debt, it became a business decision to stop investing, expanding and employing. Mortgage holders may not be as quick to sell off their dreams and will go to greater lengths to hold out, but there is always a limit and sentiment can turn quickly, IMO....
