hey I'm trying to be green here, give me a break!
seriously if you want to chop a tree down go out and grow it first
Labor in office, what will happened to property investment?
- Thread starter DonkeyKong
- Start date
hey I'm trying to be green here, give me a break!
seriously if you want to chop a tree down go out and grow it first
wow... got a link? nothing on news.com
got it
http://www.theaustralian.news.com.au/story/0,25197,22818235-601,00.html
Good on him. I suppose these kind of events force you to keep in mind what really is important.
Phil.
Should also add, I thought John Howard was very gracious in defeat, but Kevin Rudds thoughts on the road ahead, ie " we can stop for a cup of tea and an Iced VoVo along the way" left me a little concerned.
Last edited:
******************
Dear Landlubber,
1. Not when objectively speaking, proper research has already shown that ALP Government has consistently been found to be "managing" (or mis-managing?) the Australian Economy, with an higher average median inflation rate of 6.06% and a corresponding higher interest rate at double-digit figures levels.
2. ... Not when it still remains fresh in our memories that many investors have lost their entire property portfolio which the "unlucky"/ less experienced investors have tediously built up over the years, only to lose it all during the high 18% interest rate times of 1989-1990, to be followed by a Recession that Australia needs to have in 1991?
3. ...Not when during the present on-going resource boom and despite its huge tax collections from the present/recent housing booms, collectively the ALP State Governments are still in debt by A$80 billion or more, as alleged during this Federal Election even though many of state schools, hospitals and their staffing levels are in need of an urgent fix?
4. ....Not when many local small businesses in Australia, respond so quickly and negatively with a sharp quarterly fall in its business confidence level over this Federal Elections (and its outcome).
Cheers,
Kenneth KOH
Kenneth,
In specific respect to interest rates.........
Back in the late eighties, early nineties, I cut my teeth in the electrical contracting game in Melbourne.
I used to work for a lot of Chinese and Jewish developers on what you would call the higher end of the market property. The high interest rates certainly weren't stopping them then, so what will be the difference now?
These guys were making bucketloads (and so was I). It did of course come to a halt...but not as screamingly as was predicted.
Be interested to hear your thoughts.
Ciao
Nor
In specific respect to interest rates.........
Back in the late eighties, early nineties, I cut my teeth in the electrical contracting game in Melbourne.
I used to work for a lot of Chinese and Jewish developers on what you would call the higher end of the market property. The high interest rates certainly weren't stopping them then, so what will be the difference now?
These guys were making bucketloads (and so was I). It did of course come to a halt...but not as screamingly as was predicted.
Be interested to hear your thoughts.
Ciao
Nor
Business as usual for me...but I can understand Kenneth's point of view as a foreign investor who is restricted in the type of properties he can invest in (ie. new) and has additional risks to contend with.
I wonder if other foreign investors feel the same way?
And also, to what extent demand from foreign investors has been influencing the upsurge in prices in local property markets eg. in Melbourne and Brisbane, over the last 12-18 months?
Will their uncertainty or exodus impact significantly on local property price movements??
I wonder if other foreign investors feel the same way?
And also, to what extent demand from foreign investors has been influencing the upsurge in prices in local property markets eg. in Melbourne and Brisbane, over the last 12-18 months?
Will their uncertainty or exodus impact significantly on local property price movements??
***************************
and the beginning of a new era of CHANGE!
I am wondering what's the Australian Economy and its various housing markets will actually evolve out to be over the next few years, before/at the next Federal Elections in 2011?
Good for Peter Costello and I am personally happy for him;- though it is also a sad day and a great loss for Australia indeed!
I am personally confident that Peter Costello and Ian Macfarlance will be well-remembered together throughout history by many Australians and well-known economists world-wide, for their skilful and world-class excellent management of the Australian Economy, having safely, ably and successfully steered Australia out of the many major financial crises, times and again.
It is no wonder that even the legendary Alan Greenspan must pay his respect to these 2 great Australian personalities and quietly learnt and take lessons/cues from them while on his own watch previously, while running the largest Economy in the world in America.
Cheers,
Kenneth KOH
The thing people forget is that galloping inflation can be seen as good for property investors. Of course you need to suck it up and service the loans when interest rates rise but the sweet result is RISING RENTS and diminishing mortgage balances (due to the devaluing of the dollar over time). Short term pain, long term gain. Later in the cycle when interest rates come down, hey presto all our properties are positive cash flow and our mortgages are tiny. I have heard form several long term (over 35 yrs) resi ip investors who did very well indeed out of the cycles we saw in the 80s, early 90s etc. You just need to be able to afford your mortgage payments, as always this is our own responsibility to ensure we can meet our obligations.
IF Labor stuffs it all up like some think they will, it doesnt worry me at all, peope still gonna need somewhere to live.
IF Labor stuffs it all up like some think they will, it doesnt worry me at all, peope still gonna need somewhere to live.
In response to the thread title, who knows what is ahead. Labor haven't elaborated anything significant in relation to anything economically significant. They won on a platform of enviro, global warming, workers' rights politicspeak. It was enough to con a bunch of ill informed and egocentric Gen XYs and BBs....I'd love to see an age breakdown on the voting.
So much of what Labor hinted at for affordable housing and all the other nanny state nonsense they propose is total pie in the sky. No matter how much they want to upgrade infrastructure and buy kids computers for schools and stimulate affordable housing provision, they are going to hit cost blow outs like never seen before........why? because we have record low unemployment. The private sector willl always pay more for skilled labour, and any publicly stimulated expenditure isn't going to return a lot of bang for buck....
So here we go.....when is the electorate going to wake up that there is no free lunch. Anything the govt does is going to be done less efficiently than the private sector.
And Peter Garrett as Environment Minister....hooley dooley...have a look at his voting record.....the guy's a self promoting joke...
ANyway, I look forward to watching the ABC having no public enemy to attack. Will be interesting to see Kerry OBrien throwing all the easy questions at Krudd and co....and letting them blame the Coalition for all the screw ups about to unfold. OBrien won't challenge that...
So much of what Labor hinted at for affordable housing and all the other nanny state nonsense they propose is total pie in the sky. No matter how much they want to upgrade infrastructure and buy kids computers for schools and stimulate affordable housing provision, they are going to hit cost blow outs like never seen before........why? because we have record low unemployment. The private sector willl always pay more for skilled labour, and any publicly stimulated expenditure isn't going to return a lot of bang for buck....
So here we go.....when is the electorate going to wake up that there is no free lunch. Anything the govt does is going to be done less efficiently than the private sector.
And Peter Garrett as Environment Minister....hooley dooley...have a look at his voting record.....the guy's a self promoting joke...
ANyway, I look forward to watching the ABC having no public enemy to attack. Will be interesting to see Kerry OBrien throwing all the easy questions at Krudd and co....and letting them blame the Coalition for all the screw ups about to unfold. OBrien won't challenge that...
**************
Hiya TigerGT,
1. Effectively speaking, who is actually controlling the interest rate and money supply in Australia?
2. RBA has just announced o.25% interest rate increase. Some of the major lenders like NAB and CBA are increasing their homeloan mortgage rates not by 0.25% but by 0.4%-0.5%, reportedly of higher borrowing costs.
3. Ex-Treasurer Peter Costello last "cautioned" the major banks recently not to increase/passing the additional increasing borrowing costs to the local consumers as the banks are presently enjoying huge profits and many households are facing financial stress/burden.
4. So tell me, who is actually controlling the interest rate and money supply in Australia?
5. What does RBA and APRA relates to one another and to the banking/monely lending services in Australia?
6. Perhaps, AlexLee can help to clarify on this issue and further share with his related views with us, please.
7. Thank you.
regards,
Kenneth KOH
The RBA makes the decision to increase or decrease the official rate. Banks can choose to ignore them, or raise and increase more or less. We're currently getting discounts to the standard variable rate that we didn't get 20 years, ago, so in effect the banks ignored some RBA rate rises.
This increased borrowing cost is a fact. Hence why RAMS got sheared and some private equity buyouts aren't happening, for example. It's no different from bread going up because of the increasing price of wheat, say, or restaurants increasing price because of rising rent or food or wages.
Costello has no legal right to tell the banks not to aim for the highest profits that they can. Does he tell Woolies not to raise food prices because battlers are getting hurt from higher prices? Banks are run for the benefit of its shareholders, and so they should because they're public companies. If Costello wants the banks to put public service before profits, he should go nationalise the banks. Let's see how the australian people would like that.
The official interest rate is controlled by the RBA. The banks and finance companies together affect (I won't use the term control, because the objective is not control of money supply but profit) money supply. This was the Greenspan conundrum: he kept raising interest rates, but the yield curve (the 'price' of money and hence an indication of money supply movements) just didn't move up. Essentially excess liquidity allowed banks and finance companies to ignore the Fed. Theoretically, the RBA can keep raising interest rates, and the banks can (if they followed Costello's suicidal advice) keep their rates steady and keep lending money out (increasing money supply).
The RBA certainly doesn't control the whole money supply. It controls official interest rates, but market participants can and sometimes do ignore its cues.
Kenneth, do you really have to write every post like an exam question? I'd like to know your own answer to (4) and (5).
Alex
Last edited:
I always giggle to myself when people say with such conviction that we live in times of greater uncertainty about the future - hello, it's the future, which is by its very nature uncertain
Maybe I'm a bit cynical but I grew up in the cold war in Germany, so any wobble in the balance of powers made us pretty certain we'd be at the bottom of the first mushroom cloud. Didn't stop anyone around me from investing.
From what I understand economic stability is only perceived as that in hindsight, but I have to say compared to the economic wobbles in the last 30-40 years we have much better experienced markets and regulators (as they've seen quite a few crashes now) which makes me think that future economic performance is going to be more stable.
Hang on, did I just say that I think the future is much more certain now?
kaf
PS. Please don't take this as advice as the future is in fact uncertain
Maybe I'm a bit cynical but I grew up in the cold war in Germany, so any wobble in the balance of powers made us pretty certain we'd be at the bottom of the first mushroom cloud. Didn't stop anyone around me from investing.
From what I understand economic stability is only perceived as that in hindsight, but I have to say compared to the economic wobbles in the last 30-40 years we have much better experienced markets and regulators (as they've seen quite a few crashes now) which makes me think that future economic performance is going to be more stable.
Hang on, did I just say that I think the future is much more certain now?
kaf
PS. Please don't take this as advice as the future is in fact uncertain
Kaf, the one thing the cold war didn't teach you is the extent of human greed.
Many economists say the sub prime fallout won't finish until the middle of 2008.
A mushroom cloud is quick and terminal.
The sub prime fallout might be slow and tortuous.......
Two totally different breed of cattle....
******************************
Dear Ausprop,
1. Your thoughts seem to be fundamentally quite different from the other members.
2. Is this a typical WA Vs Eastern States Australians' divide or what?
3. I find my own political thinking to be closer to yours, with respect to how we see the present Federal Elections outcome and what is deemed to be good for Australia in the long run.
4. Does it has to do with both of us being physically located in WA or are there some good reasons why our investment/political thinkings are closer in this regard?
5. Thank you,
Cheers,
Kenneth KOH
*************************
Dear Nathan,
1. Interesting comments.
2. General softening in housing prices across the various Australian States or in certain specific State/suburbs only? Why?
Cheers,
Kenneth KOH
IMO one of the best pieces of investment opinion ( wanted to say advice ) on this forum. Not only applies to property but ALL investment classes. It has a technical name " Reversion to the mean theory" and has proven to be one of the most successful ways to invest.
Congratulations Alex you will do well.
cheers
Goyco
There's a poultice of gloomy credit data flying around, but here's the guts: Eurodollar deposit rates that determine how much top flight US banks pay for short-term funds were at 5.1 per cent on Wednesday night, and money invested in US Government short-term T-bills was paying 3.08 per cent. That is a 200 basis points or 2 percentage-point gap, which is cavernous compared to the usual spread of about 15 to 20 basis points, as wide as the spread was in August when the credit crisis flared, and 50 basis points worse than the blowout in spreads that accompanied corporate collapses in 2001 and 2002, including Enron and WorldCom..
Winston, that's a quote from the smh.com.au the sooner the Libs bring Malcolm Turbull,or front row Joe and start to plan how they will win the next election the better,if Turnbull had taken control 9 months ago then it would be a different story today,but what happened yesterday will make the LIBS more powerfull in the longrun,just give Labor time then the people that voted for him will understand what it means when he said several times..I Make No Promises..willair..
http://www.smh.com.au/news/federal-...eyes-leadership/2007/11/25/1195962826384.html
