What I meant to say is that the cheapest 10% of all landed property sales will see greater capital gains than most people would expect. There is safety in buying well located cheapies (preferably not units or apartments) in major cities. That's just my opinion. No doubt the doomsayers will disagree........for them, olive trees and ostrich farms are the way of the future (when they aren't hoarding up on gold and silver).
NZ Cuts Interest Rates. Ours Will Follow Within 12 months
- Thread starter meconium
- Start date
What I meant to say is that the cheapest 10% of all landed property sales will see greater capital gains than most people would expect. There is safety in buying well located cheapies (preferably not units or apartments) in major cities. That's just my opinion. No doubt the doomsayers will disagree........for them, olive trees and ostrich farms are the way of the future (when they aren't hoarding up on gold and silver).
having just stepped back in the country on wednesday ... i will beg to differ.
compared to the sentiment in nz, australia is positively bubbling with joy. it's a "being on the ground and listening to the locals" thing.
unemployment here is low - in nz the government is creating jobs to keep people employed (think old time 3 guy garbage collection instead of the 1 guy wizz bin) - house prices have dropped around 20-30% - petrol is now at $2.30/litre - and interest rates were a heck of a lot higher than australia.
hey - at least they are now exporting apples to australia. that was really really big news - just to show how doldrum things really are, that they get excited about something that wouldn't even blip on australia's radar.
as for future of interest rates? i hope they fall as i've got some more i want to lock in, but i ain't counting on it in the immediate term.
I will go further and say that a rate cut will happen this year, as early as Aug-Sept. Why? Because the economy is hitting some seriously rough spots that even the resource boom cannot overcome:
1. Overseas student market (a huge export of sorts) drastically down.
2. Overseas tourism has plummeted. Places like Cairns are taking a huge hit and many businesses are being badly hurt, with many jobs lost.
3. More Aussies are spending their cash overseas. Either in holidays or in overseas assets or often just on ebay. Not good for domestic employment.
4. Major natural disasters have caused havoc and loss of export revenue in both the mining and agricultural sectors.
5. Consumer sentiment is on a 9 month low, off a low base.
6. An excessvely hight exchange rate = less jobs for Aussies
The budget this year needs to be trimmed. Or so Julia says. Expansionary fiscal policy won't be able to take up the slack from reduced Domestic Consumption and Investment.
The RBA will have no choice but to act. I suspect the first rate cuts may occur as early as August-September. By December, there will be a definite downward trend in interest rates.
This will be a welcome relief for property investors. The usual caveats apply. Don't use falling rates as an excuse to buy overpriced inner-city junk that will have no potential to appreciate anytime soon. Buy cheaply, taking care to select low status, cheapest- of- the-cheap suburbs in major cities. Melbourne is my preferred pick for outperformance. Again, not the innercity. Buying overpriced apartments and small shoebox units will leave you disappointed in the long run.
Goodluck everyone. I hope this has given some of you a glimmer of hope that the light is at the end of the tunnel. After 7 consequtive interest rate hikes since late 2009, I daresay we deserve a break. No other OECD country has had to suffer 7 rate hikes since the GFC. It's time for us battlers to have a break.
Those of you who have taken my challenge will owe me quite a few mars bars. Be sure to pay up.
1. Overseas student market (a huge export of sorts) drastically down.
2. Overseas tourism has plummeted. Places like Cairns are taking a huge hit and many businesses are being badly hurt, with many jobs lost.
3. More Aussies are spending their cash overseas. Either in holidays or in overseas assets or often just on ebay. Not good for domestic employment.
4. Major natural disasters have caused havoc and loss of export revenue in both the mining and agricultural sectors.
5. Consumer sentiment is on a 9 month low, off a low base.
6. An excessvely hight exchange rate = less jobs for Aussies
The budget this year needs to be trimmed. Or so Julia says. Expansionary fiscal policy won't be able to take up the slack from reduced Domestic Consumption and Investment.
The RBA will have no choice but to act. I suspect the first rate cuts may occur as early as August-September. By December, there will be a definite downward trend in interest rates.
This will be a welcome relief for property investors. The usual caveats apply. Don't use falling rates as an excuse to buy overpriced inner-city junk that will have no potential to appreciate anytime soon. Buy cheaply, taking care to select low status, cheapest- of- the-cheap suburbs in major cities. Melbourne is my preferred pick for outperformance. Again, not the innercity. Buying overpriced apartments and small shoebox units will leave you disappointed in the long run.
Goodluck everyone. I hope this has given some of you a glimmer of hope that the light is at the end of the tunnel. After 7 consequtive interest rate hikes since late 2009, I daresay we deserve a break. No other OECD country has had to suffer 7 rate hikes since the GFC. It's time for us battlers to have a break.
Those of you who have taken my challenge will owe me quite a few mars bars. Be sure to pay up.
Meconium if you are right i'll give you a mars bar because ill be heaps happy if rates are cut 
not because im betting with you
not because im betting with youah - when you said "sooner" in your orginal post, i took it to mean "sooner" as in the next 2-3 rba meetings.
december is another 9 meetings away so i would have called that medium term.
through observation, i consider an interest rate cycle to be be 3-4 years in length on average (from peak to peak or trough to trough) so, to me, 9 months for a drop to begin (not the trough) is around 1/3 of a cycle and not short term.
but that is just me.
december is another 9 meetings away so i would have called that medium term.
through observation, i consider an interest rate cycle to be be 3-4 years in length on average (from peak to peak or trough to trough) so, to me, 9 months for a drop to begin (not the trough) is around 1/3 of a cycle and not short term.
but that is just me.
I'm being overly cautious. I reckon talk of rate cuts will happen as early as August/Sept. Ceteris Paribus.
NO WAY!
you mean sentiment might actually have an effect on prices and the economy?
but we can't measure it!
that's unpossible!
being here i can say it's a mixed bag - rapidly doesn't define where i am, having just made ANOTHER $40k on my recent (Tuesday's) valuation.
the best bit is, if you can't afford to hold, the executive rentals are suddenly up in enquiries and placements.
it's interesting when eastsiders make bold claims about the WA property market, especially generically.
the activity up north is just astounding. seriously, astounding, and i'm seasoned to it.
....okay Port Hedland is travelling okay....but Perth???
I was going to get in to the Perth market but have held back.
Too many good deals in the NSW market.
The Qld market is in dire streets....there is a block of units where the owner wants 1.25m...offered 700k ....still negotiating. Don't like my chances though....at least he did not swear at me.
Since the floods and cyclones....the sales market is poor...but the rental market is a lot better. Just raised rents on my rentals in Margate and Deception after a very long time.
I was going to get in to the Perth market but have held back.
Too many good deals in the NSW market.
The Qld market is in dire streets....there is a block of units where the owner wants 1.25m...offered 700k ....still negotiating. Don't like my chances though....at least he did not swear at me.
Since the floods and cyclones....the sales market is poor...but the rental market is a lot better. Just raised rents on my rentals in Margate and Deception after a very long time.
mate the deals available since Christmas in Perth defy belief.
It all depends what you want to do with a site or property.
it'll be made common knowledge in about a year or so when I'm through, hopefully by then at least a few people would have caught on but then hopefully not and we continue to cream it.
that said, invest where you see value. if you see in NSW, then invest there.
i see golden opportunity here, so i put my money here. horses for courses.
It all depends what you want to do with a site or property.
it'll be made common knowledge in about a year or so when I'm through, hopefully by then at least a few people would have caught on but then hopefully not and we continue to cream it.
that said, invest where you see value. if you see in NSW, then invest there.
i see golden opportunity here, so i put my money here. horses for courses.
I honestly can't see how there'll be a rate cut. NZ is a completely different kettle of fish. For the past 15 years, NZ has been dragging its heels (parents have some investments over there and they've never done well through it).
Australia is facing some small economic hicups, but so does every country in amidst the greatest booms. Reality is unemployment is approaching new lows, wage growth in many sectors are spiralling faster than employers can keep a lid on. This is true for many sectors like mining (eg the actual mining companies), mining services (the guys building tent sites, providing drill rigs etc), skilled labour (ie engineers, geologists etc), industrials --> all this flows through to banking & finance (lending, advisory, capital markets etc), construction and non-mining skilled labour (competition for the same labour), professional advisory (lawyers, consultants etc). Sure retail is hit a bit, but consumer confidence is probably so fickle it'll be up as quickly as it came down.
I'd venture to say we'd be 50bps minimum higher by the end of 2011. Bet 4 Mars Bars on it.
Australia is facing some small economic hicups, but so does every country in amidst the greatest booms. Reality is unemployment is approaching new lows, wage growth in many sectors are spiralling faster than employers can keep a lid on. This is true for many sectors like mining (eg the actual mining companies), mining services (the guys building tent sites, providing drill rigs etc), skilled labour (ie engineers, geologists etc), industrials --> all this flows through to banking & finance (lending, advisory, capital markets etc), construction and non-mining skilled labour (competition for the same labour), professional advisory (lawyers, consultants etc). Sure retail is hit a bit, but consumer confidence is probably so fickle it'll be up as quickly as it came down.
I'd venture to say we'd be 50bps minimum higher by the end of 2011. Bet 4 Mars Bars on it.
one major problem with new zealand is that they have an even higher "welfare" mentality than in australia (if that is possible) - and their anti-discrimination has gone too far.
an example - in nz the aged pension is NOT means/income tested as the government didn't want to discriminated against older people who have worked to get their own asset basis.
therefore, "everyone" over 65 in nz gets the aged pension, no questions asked, regardless of whether they are multimillionaires or poverty level.
an example - in nz the aged pension is NOT means/income tested as the government didn't want to discriminated against older people who have worked to get their own asset basis.
therefore, "everyone" over 65 in nz gets the aged pension, no questions asked, regardless of whether they are multimillionaires or poverty level.
I did not say that there are not good buys....just think I will sit on my hands for a couple of months longer......
With the advent of the slowing of the economy....more deals will appearing in Perth.
From the people I am talking to there is two-tier economy in WA. The mining towns are going well. Most part of Perth not so good....particularly high end property.
I plan to get into the WA market...but the stuff I am buying in NSW is giving me about $50k in equity and am getting a 7.5% return. And these are in large urban areas.
If I buy in WA....the return will be about 5.5%....so negative CF for longer than 2 years. Agree that Perth offers some great opportunities...but it will be a bit longer before it really takes off....agree that development sites offer opportunities.
With the advent of the slowing of the economy....more deals will appearing in Perth.
From the people I am talking to there is two-tier economy in WA. The mining towns are going well. Most part of Perth not so good....particularly high end property.
I plan to get into the WA market...but the stuff I am buying in NSW is giving me about $50k in equity and am getting a 7.5% return. And these are in large urban areas.
If I buy in WA....the return will be about 5.5%....so negative CF for longer than 2 years. Agree that Perth offers some great opportunities...but it will be a bit longer before it really takes off....agree that development sites offer opportunities.
Lizzie - you mean when (or if) they fall right? Not suggesting locking in at current levels?
