Rates down 0.25% again

A

Anonymous

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From: Anonymous


OK so interest rates have come down again. What does it mean in an already hot market? eg Brisbane, Melbourne, Canberra, Sydney.

More of the same?
 
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Reply: 1
From: Robert Forward


BOOM....


Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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Reply: 1.1.1
From: See Change


Rolf

is the echo people bouncing of the wall ??!!

safe investing see change
 
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Reply: 1.1.2.1
From: Sergey Golovin


Good time to unload the stock if anything to sell ofcourse.

Then put money into term deposit and wait for the property prise to drop to start fresh.

Serge.
 
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Reply: 1.1.2.1.1.1
From: Anonymous


So it seems that we a heading for a 10% rise in house prices followed by a 20% fall.

How are the vacancy rates going? Any one having problems with finding tenants? If so expect it to get worse!

Lack of tenants = rent $ down = price collapse. Its not a matter of if, but when.

I give it 6 months at the outside. Reduction in FHOG will stop feeding the bottom end and when interest rates go back up there will be greater buying opportunities.
 
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Reply: 1.1.2.1.1.1.1
From: H T


cant remember the last time inner city property fell 20%...but I reckon we're in for a flat out gain and then maybe a few years of little or no growth and outer suburban stock dropping (20%??) or to a point where many punters owe more than their property is worth..

Have to remember that our 2 biggest trading partners are in strife. Japan has a 1% drop in GDP for the quarter!!!!this is bad news for aus as we have 20% of our exports going there. The RBA didnt drop rates 'cause they think we're in for a good time, its inevitable IF the states follow Japan that we are in for some tough times.

HT
 
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Reply: 1.1.2.1.1.1.1.1
From: Paul Zagoridis


One thing I learned way back as an economist is "nobody knows anything". That goes with "you can always find someone who accurately predicted an event if you look hard enough".

For what it's worth ;-) I totally agree with HT. Japan and US is not good, and the RBA is worried.

20% price drops in capital city property? I don't see it, but I've been wrong before. 20% drops in overpriced, speculative property? Yep.

I suggest people make contingency plans for best and worst cases. Then deal with what is and not what should be. Plus remember to admit to themselves when they got it wrong - and get out of a bad speculation.

Anybody else found it hilarious that Anonymous said "I give it 6 months at the outside." Are you going to come back then and say "Aha! Told you so"? Strong opinion from anonymous is no opinion. Register under a nickname, then develop a style that is yours. We don't need to know who you are - just that you are not that other Anon (there are so many).

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
 
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Reply: 1.1.2.1.1.1.1.1.1
From: Anonymous


Your statement that you don't know anything proves that you do!

The US has bottomed and is on the way up albeit slowly.

The average investor is buying inner city units, hence the 20% comment.

I like being anonymous..........
 
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Reply: 1.1.2.1.1.1.1.1.1.1
From: Kevin Forster



Big drops in overpriced speculative properties when the crash comes I agree totally. This will apply to all properties.

What is the definition of outer suburban properties? Many properties in the 30-40 km from the CBD are selling for less than it would take to rebuild them. Don't see this sort of property dropping much in the crash

I checked the REIV and the last time Melbourne Metro dropped was the September quarter in 2000.
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1
From: Jim Kouta


Hey everybody, WAKE UP!!!!!

Of course there's going to be a **CRASH**. When was the last time, in any market, stocks, property, emu's, crocodile skin, etc where value rose 65% in 3 years and not **CRASHED**. I could be wrong, but I tell ya' what, after being in the industry for over 35 successful years, I got this funny feeling!!! ......and it's not good.

What goes up, comes down.
What goes up quickly, crashes down.
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1.1
From: Peter Davidson


Finally, somebody has their thinking cap on.

Well said Jim!

I'm definitely out for a while. Time to enjoy life and go on a holiday this year. Get back into it mid 2002 and pick up 2 or 3 bargains, rather than being ripped off now and paying dearly for 1 property over the next 10 years.

KABOOM!!!!!!!
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1.1.1
From: H T


I disagree with you guys.
I dont believe it will crash, just fluff along like in the 90, 91, 92 where there was -4%, -2% ish - cant remember the rest of the stats.

But I agree on your attitude about not getting caught up in the buying hysteria...unless you are buying to hold for a LONG LONG time because if you think back to 1989 when the boom was full bore, who amongst us would not have wanted to buy at those prices now. It seemed absoloutely bannanns at the time,(sound familiar) and prices were going up weekly (sound familiar)
but good stock stopped increasing and only started moving about 3 years later. It was the average property and the expensive top end that really copped a hammering

Thats what im betting..
any takers?

HT
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1.1.1.1
From: Anonymous


Hmmmm ........ depends on where your stock is, what price range, etc.
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1.1.1.2
From: Anonymous


H T,

Due to my popularity on this web site and support for IP's, I'd rather not post my name. Unfortunately, I am not as supportive as I was a year or two ago as using property to create wealth, unless you really, and I mean really know what you are doing and are in a niche market.

I believe that we are in a very volatile period and it's the amateurs who are going to get burnt. Ie, people who have read a few books, have 1 to 3 years experience, maybe have 1 investment property, watch "Location, location" & "Hot Property" on TV, etc, etc...you get the drift and have way too much confidence in themselves and the market.

A house I bought in 1990 for $120K is now worth $360K. It has tripled price in 11 years. My salary back then was 45K per annum. It is now $85k per annum. My salary hasn't even doubled, yet my house has tripled! Get the drift! Little things like these that people tend to forget. I borrowed $40K back then, now I'd need to borrow $250K on a similar house. Could I afford to ride the storm if there was an economic change now, no, I have borrowed too much. Would I have to sell my house to survive, yes. Would somebody else pick up my property cheaply, yes, yes, yes. It's the little things in life people forget.......

Invest wisely my friends and don't get caught up in the buying frenzy.
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1.1.1.2.1
From: Sergey Golovin


Yep.

Anon, Non Anon, Independent...
OK, I'll go independent this time around.

I agree with last Anon - salary did not go up as much as real estate. Something has to give. I did mentioned that about 3-4 months ago.

Get new Government in and increase all the salaries all across the range, to keep the property prise on same level, so they can afford it and we can enjoy the ride.

Give'm more money and get another 10,000 immigrants in.

No, no, this is just a thought, that’s all.

Do not listen, please do not.


Serge.
 
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Reply: 1.1.2.1.1.1.1.1.1.1.1.1.1.2.1.1
From: Anonymous


$14,000 before tax makes up for a lack of income growth don't you think?
 
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Reply: 1.1.2.1.2
From: Terry Avery


I did some back of the envelope calculations on selling a property then
waiting for the market to drop and then buying back in. What I found was
that if you take selling costs and buying costs into account then property
would have to drop 13.6% just so you would break even. That assumes you are
able to sell just before the bubble bursts. If you sell and the market rises
another 10% and then drops back it would then have to drop back 25% for you
to break even. I guess this is why buy and hold makes a lot of sense for the
average investor as you stand to lose if you sell and pray the market drops.

Anyone out there experienced a 25% or even 13% drop in the market? My
reading hasn't revealed a drop of that magnitude, more like 5% is considered
a disaster. Of course it can drop a lot if you look at Japan, Hong Kong or
other Asian markets for examples and it could always happen here too, as it
did with shares.

Cheers
 
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