Interest Rate Rises... where will they stop?
- Thread starter Shadow
- Start date
No doubt. Just as mine i'm entering the market.
Assuming they survived, what would you say to someone who bought a property in 1991?
Not to mention what this will do to the longterm share-price..
..willair..IMHO..
"http://img183.imageshack.us/img183/5701/nationalbankmm1.gif"
I'd prob ask: "if you had your time over would you have bought then again or waited till later in the decade?"
And if that person had invested diligently, they would answer 'that first property? Yeah, I would have bought then again, because after that I bought a dozen more and now they're all worth x times what I paid'.
Alex
Do you honestly think they'd say that?
Or would they say "i prob would've held off for a short while and bought a little bit later"?
Yes those that bought in 1991 and held have eventually done very well. How was life for them during those tough years though. Why are those years worth less than the ones now when they have finally reaped the rewards of their earlier investments? Could those people have bought 5,6,7 years later and still made a very similar return on their investments minus the heartaches and tough times of the early 90s? Probably. Would they have rather done that? I think so.
Personally, I started buying in 2000. Ask me 'in retrospect shouldn't you have bought more earlier on?' With full hindsight, yes. You're basically asking 'would you have preferred to time your entry into the market perfectly to take advantage of the cycle?' Sure. But I realise that you can never do that, because I DON'T have a crystal ball. Instead, I bought when I could.
Would I rather have bought more in 2000? Of course. Do I have regrets? Not really. I did what I did for good reasons, and I have some decent results.
What I've observed is that in the long run people tend to regret the properties they DIDN'T buy, not the ones that they DID buy because they're making a lot from them anyway. But if someone is the type to complain 'Yeah, I'm rich but I wish I'd done it better so that I'm even richer', that's a whole new problem.
Alex
I think it's time to regulate the banks or to open up the market for the entry of more banks to increase competition.
They are taking our money and give us nothing in interest, then they give our money to someone else and charge 8% , they charge us fees for anything we do, they make billions and they want more?
This has to stop.
Cheers
They are taking our money and give us nothing in interest, then they give our money to someone else and charge 8% , they charge us fees for anything we do, they make billions and they want more?
This has to stop.
Cheers
We ARE open. Pretty much any company can open up a mortgage lending company in Oz. Overseas banks can come in and open up if they wanted to.
What's the problem? You can find high interest accounts that aren't far from the mortgage rate. They won't charge you fees if you understand their rules. If you begrudge their profits, buy bank shares and get in on the action.
Stop, and then what? Have the government control all of our banking?
Alex
That would be nice
In an open market, competition works to favour the cosumers.
Here we have an oligopoly, the big four are taking us for granted
so their greed must be stopped.
I haven't checked other banking systems lately but I can't believe that this rippoff banking culture we have here would be left unegulated if it existed in the US, EU or other countries.
I don't know the industry that well (maybe there's someone here who can shed more light on the subject), but my mate at CBA was telling me couple months back how they are making so little margin between what they are lending for and what they borrow at, they would have no choice but to increase rates independently. What happened, CBA increased fixed rates last week.
I should ask him again, but I think at the time he said the margin they were making was only something like .1 or .2% (I do stand to be corrected by all means) - so I don't think it necessarily a case of the evil banks in this case.
(I am not referring to deposit vs loan rates, I'm talking about how much CBA get's their money for on the wholesale markets etc)
I should ask him again, but I think at the time he said the margin they were making was only something like .1 or .2% (I do stand to be corrected by all means) - so I don't think it necessarily a case of the evil banks in this case.
(I am not referring to deposit vs loan rates, I'm talking about how much CBA get's their money for on the wholesale markets etc)
Just had a quick chat with him. I remembered wrongly - they are not making a profit margin of .1% on their loans. They are losing 0.4% on their lending (I think he was referring to residential - commercial etc is probably different) - about the same as NAB according to him.
He said whilst NAB have lifted there's this week, it won't be long before the rest of them do, but they are all trying to wait out the credit crunch so they don't have to be the bad guys.
(as I said, I don't know a lot about this subject, so someone with better knowledge of the internals of the banks please feel free to jump in)
He said whilst NAB have lifted there's this week, it won't be long before the rest of them do, but they are all trying to wait out the credit crunch so they don't have to be the bad guys.
(as I said, I don't know a lot about this subject, so someone with better knowledge of the internals of the banks please feel free to jump in)
In the at call deposit market, I agree. The big 4 basically control the ATM network and charge enormous fees for access by any new institution, stifling competition.
But in lending it's just not true any more. Have a look at the paper. There are literally hundreds of lenders out there to choose from, all undercutting each other. If you don't want a loan from Big 4, why stay with them? Leave and get a loan from ING, Virgin, HSBC, Citi, Bank of SA, BankWest or any of the others!
Even in the call deposit market, use a high interest account. Have a mortgage on one of those professional packages and you don't pay much fees. I haven't paid a bank fee for years.
I draw money from the ATM maybe 2-3 times a week. I use my credit for everything else and have it automatically paid from my cash management trust.
Alex
I do most of the above, but banking with a credit union is not as convenient because I don't have any loans with them. Additionally, trying to find a CU ATM could be an issue.
Anyway, coming back to the topic I don't believe that the banks will stop here.
They have found an excuse to put up interest rates and to increase their profits so they will go for it.
