precient post

[ali]

So back in May the media, the economists and the reserve bank were talking up interest rate rises and in the midst of all that came this:
http://www.somersoft.com/forums/showthread.php?t=71398
I am very new to the IP game and this post really got me thinking. I did a lot of reading and thinking and decided there was a fair chance Sash was right, we were probably at the top of the interest rate cycle. So... we went out and bought another IP, in an interest rate sensitive area. (Btw we did factor a couple of rate rises into our calculations just in case.)
So thanks to Sash for 'puting it out there'. Experienced investors willing to share their insights on this site have been fantastic for an L-plater like me.
Cheers, Ali

 

[Tehanu]

This probably won't make you feel good since you recently bought a property and I'm a major Australia is in a housing bubble that is going down supporter, but I made the call that the next interest rate move by the RBA is more likely a cut than a rise even earlier (Jan 2011):

http://www.somersoft.com/forums/showthread.php?p=755274&highlight=interest+rates#post755274

I think I'm going against consensus here, but hey, what's new

I think the next move the Reserve Bank makes up or down will be down.

So I'm going for stable and then interest rate cuts.

The UK and US central bankers have been keeping interest rates ultra-low to prop up asset prices despite the effect this has been having on food and energy prices in those countries which just goes to show where central bankers' priorities lie when push comes to shove. Also as recent events have shown in the face of deflation, central banks have started throwing out even their sacred mission of preserving the stability of the currency as well. Deflation really scares central banks.

The reason why I called it then was because I believed that the Australian economy was fundamentally weak and unstable, despite what seemed like good stats. It just takes a while to show up in the official stats. And this weakness will be a very bad thing for the property market. Actually the RBA really should have started cutting months ago.

Of course now we've got to see whether my predicted death spiral with Australian banks and the Aussie dollar actually happens. Personally I think the AUD is in a bubble too.

 

[random]

Start of year I figured one or two small rises and then down from there as things slow. But although since then any rises have looked out of the question for awhile now I was still surprised they went down today to be honest. I more thought at this stage they might sit a bit longer first. Makes you wonder what the real numbers are looking like right now.
They are stuck between a rock and a hard place though, in ways very similar to the UK.
Average people , families , have so much tied into huge property prices right now which I guess far out ways living costs right now in a way. Attempting to protect prices they've all been paying this last decade surely has to be the first concern .

Cheers

 

[sash]

Thanks for very supportive comments.

I article I say that Perth will continue to head down...I have started to change my mind about Perth in select areas. Will let you know more when I have moved on my thoughts.

Also...I think the depth of how much the cut is going to be - i.e. 1%...1.5% to reach bottom is going to be hard to predict. All I know is that if rates drop below 5.8% I am going to start fixing my rates....particularly the 2 and 3 year rates.

So back in May the media, the economists and the reserve bank were talking up interest rate rises and in the midst of all that came this:
http://www.somersoft.com/forums/showthread.php?t=71398
I am very new to the IP game and this post really got me thinking. I did a lot of reading and thinking and decided there was a fair chance Sash was right, we were probably at the top of the interest rate cycle. So... we went out and bought another IP, in an interest rate sensitive area. (Btw we did factor a couple of rate rises into our calculations just in case.)
So thanks to Sash for 'puting it out there'. Experienced investors willing to share their insights on this site have been fantastic for an L-plater like me.
Cheers, Ali

 

[Aaron Sice]

Of course now we've got to see whether my predicted death spiral with Australian banks and the Aussie dollar actually happens. Personally I think the AUD is in a bubble too.

as rates are cut, the AUD will fall - was off 2.25% yesterday on news of the cut and nearly another 1% today already (*EDIT* 2.25% again not half hour later - 4.5% total in 2 days.)

PMs will rise on the back of this, but jobs will also be created.

win-win for WA.