Rates heading which way?

[Deltaberry]

Only thing I'm passing onto my tenants is a rent rise.

Sheesh! Some of these tenants are naive, aren't they? Why do they think investors buy properties? Not as a charity to them, that's for sure.

It's all good! A nice not so little saving due to interest rates as well as another $100pw in increases coming online again soom.

Oh yea I love this. Falling rates, rising rents, falling A$.

 

[TKline]

That's very optimistic. Though if it does happen:

X - boom
X - boom
XX - boom
XXX - tick boom tick

How can house prices possibly boom again?

We're coming off the back of the biggest boom in history!

No more booms for a while IMHO.

 

[Deltaberry]

How can house prices possibly boom again?

We're coming off the back of the biggest boom in history!

No more booms for a while IMHO.

That's not what boom means.

http://www.theaustralian.com.au/bus...e-viral-globally/story-e6frg8zx-1226166759486

 

[mattnz]

Guaranteed to drop after European hysteria overnight.

 

[Deltaberry]

True that no one really knows where interest rates will head. The market can do anything between now and the end of 2012. But if you had to make an educated guess of whether interest rates were going to drop or rise when the market is expecting it (see Berlina's chart) and the majority of the people on the poll are expecting it, I would be more inclined to say they will drop.

The majority thought it would rise not long ago.

 

[Graemsay]

I voted for a full percent over 12 months. Things could turn nasty very quickly, and the US, EU and China have all spent their fiscal ammunition on the last crisis.

If there is a double dip recession elsewhere, then there's a good chance that Australia will suffer. The economy seems to be slowing now, which isn't a good sign. In that case I'd expect the RBA to cut rates hard and fast.

 

[Aaron_C]

I voted for a full percent over 12 months. Things could turn nasty very quickly, and the US, EU and China have all spent their fiscal ammunition on the last crisis.

If there is a double dip recession elsewhere, then there's a good chance that Australia will suffer. The economy seems to be slowing now, which isn't a good sign. In that case I'd expect the RBA to cut rates hard and fast.

Retail is very very bad here in Melbourne...rents are just too high to justify opening a viable business.

 

[Deltaberry]

I voted for a full percent over 12 months. Things could turn nasty very quickly, and the US, EU and China have all spent their fiscal ammunition on the last crisis.

If there is a double dip recession elsewhere, then there's a good chance that Australia will suffer. The economy seems to be slowing now, which isn't a good sign. In that case I'd expect the RBA to cut rates hard and fast.

That's why I dump my AUD fast.

And even if it doesn't fall, I get better returns elsewhere

 

[lizzie]

Retail is very very bad here in Melbourne...rents are just too high to justify opening a viable business.

and why would you ... I bought an ipod touch for daughter for Chrissy, for a full $100 cheaper than at Dick Smith.

I am all for supporting retail - but a 30% difference on a large-ish priced standard item is too hard to ignore.

 

[MarkandTina]

It depends on what you mean by supporting retail.

My wife works in a store in a Westfield complex, and Westfield plans to bring in paid parking, which will cost us probably $50/week for the privilege of her working there.

I'm very happy to support the mum and dad businesses in that complex, but the owners do not have my support.

But sorry, I digress.

 

[Deltaberry]

I'm not happy to pay a dollar more for the same thing.

 

[Aaron_C]

It depends on what you mean by supporting retail.

My wife works in a store in a Westfield complex, and Westfield plans to bring in paid parking, which will cost us probably $50/week for the privilege of her working there.

I'm very happy to support the mum and dad businesses in that complex, but the owners do not have my support.

But sorry, I digress.

Obviously I am talking about the shop owners themselves rather than the landlords...when rent is about 20%+ of your total turnover you got a serious problem.

 

[Aaron_C]

and why would you ... I bought an ipod touch for daughter for Chrissy, for a full $100 cheaper than at Dick Smith.

I am all for supporting retail - but a 30% difference on a large-ish priced standard item is too hard to ignore.

That's right lizzie and it's going to get worse. Which is why I think the only retail right now that can (possibly) make money in the foreseeable future is food. Food (particularly cooked food) is non-standard, perishable, cannot be ordered online and is 100% dependent on bricks+mortar for operation. But whether landlords will come to the party on this new business dynamic is another matter, of course.

 

[lizzie]

I'm not happy to pay a dollar more for the same thing.

... and I'm happy to pay $80 in store for something I can get for $70 online - but $100 difference was just a bit hard to swallow.

Also heard that our local Westfield has put their rents up again ... and reduced the number of free staff carparks by 20%. Totally sux. I feel for the retailers - but ... $100 on a 30 second purchase from the armchair was $100.

 

[jaycee]

... and I'm happy to pay $80 in store for something I can get for $70 online - but $100 difference was just a bit hard to swallow.

Also heard that our local Westfield has put their rents up again ... and reduced the number of free staff carparks by 20%. Totally sux. I feel for the retailers - but ... $100 on a 30 second purchase from the armchair was $100.

I think when the difference is too big to be ignored, most of us would consider it and why wouldn't you ? My mother, who has only pretty much seen computers as things used by other people would be curious about the buying online with some fo the vast price differences.. if its only $50 off a tv or something like that I wouldnt bother either.... but some sutff is ridiculously discounted compared to RRP

 

[Deltaberry]

Yes and when one can buy a very middle class house for $500k - instead of $800k - in a city more developed than Sydney, with far greater growth prospects with higher GDP at say 5% and lower unemployment of around 3%, with mortgage rates of 2.5%, you'd have to wonder why you'd not buy there if you were to buy yea?

 

[Belbo]

Yes and when one can buy a very middle class house for $500k - instead of $800k - in a city more developed than Sydney, with far greater growth prospects with higher GDP at say 5% and lower unemployment of around 3%, with mortgage rates of 2.5%, you'd have to wonder why you'd not buy there if you were to buy yea?

DB, I know you mean well, but most of us are simply too old now to ever learn how to read the relevant contract paperwork (or believe a translation). That's just how it is.

 

[Intrinsic_Value]

Retail is very very bad here in Melbourne...rents are just too high to justify opening a viable business.

For those interested in this space (ie retail property), check out 15/20 yr rent increases vs retail sector sales increases. Before the GFC the harmony was maintained throug increased margins. With the attact of online/internet, there is no way i am going anywhere near this.

 

[Intrinsic_Value]

... and I'm happy to pay $80 in store for something I can get for $70 online - but $100 difference was just a bit hard to swallow.

Also heard that our local Westfield has put their rents up again ... and reduced the number of free staff carparks by 20%. Totally sux. I feel for the retailers - but ... $100 on a 30 second purchase from the armchair was $100.

people will ALWAYS act in their own individual best interest.
Your point highlights why i am nervous of this whole sector (property and retail plays). I am an opportunist, so there will be periods when i will take an opportunistic view on a situation, but that doesnt mean its a 'buy and hold', i will hold an even dimmer view whereby that situation is illiquid.

 

[Intrinsic_Value]

That's why I dump my AUD fast.

And even if it doesn't fall, I get better returns elsewhere

i am spending alot of time reflecting on this. It will be one of the significant wealth drivers for those with australian assets/income.

But here is the dilema:
: as the AU$ declines there are alot of assets which will appreciate in value.

So what will be the net:net effect????????