Rates up .25%

[ani]

http://www.abc.net.au/news/newsitems/200605/s1629280.htm

 

[Glebe]

damn it

and here are my 10 characters

 

[juzz]

Oh well,

More upward pressure on Rents & Charge out rates....
I know what I'm gonna do..

Juzz

 

[mja]

Just did some calculations - it'll push my mortgage on my investment property from 6.62% to 6.87%...and I'm was about to rent it out at the end of this month for $400/week.

The rate rise makes repayments $13 dearer a week.

I had better tell my property manager to make that $410/week.

-- MJ.

 

[Cheeks]

I'd make it $415/w

0.25% means just over $6k per year for me

 

[flatout]

IP loans fixed

Interest rates have been sitting at an all time low meaning they were always going to go up. Basically a case of "when" not "if". This is exactly the reason we fixed the interest on our IP's for 3 yrs. The way I see it, this will put some upward pressure on rents as landlords try to pass on some of the pain. Whilst our repayments will remain the same, we'll peg our rents to the market rate so in theory this interest rate rise could actually work in our favour and put more money in our pocket

Flatout

 

[DCA]

This wont be the last one if Petrol Price staying high or going higher...
I'm expecting another rate rise next year if not sooner

 

[MarkB]

Interest rates have been sitting at an all time low meaning they were always going to go up.

That "all time" low (lowest in about 40 years) was actually about 4.5 years ago (late 2001 / early 2002).

Since that time - and before today's rate rise - the the cash rate had increased from 4.25% to 5.50% - so up almost 30% (now it is up 35%).

I disagree that because rates were low (as you can see they weren't that low) that they had to go up. They went up owing to economic factors. If the economic factors had been the other way, they would have fallen.


Mark

 

[MichaelW]

You little ripper!!!

I was hoping they would but wasn't brave enough to tip it. Now if only they would put it up another .25% in the next couple of months then it might really do some damage to Sydney real estate prices.

I'm going to go off and do another "rates dance"...

Woohoo!

Michael.

 

[DCA]

My share value has drop in relation to the rate rise
more to come this week I think ... Interesting time ahead ..

 

[oc1]

You little ripper!!!

I was hoping they would but wasn't brave enough to tip it. Now if only they would put it up another .25% in the next couple of months then it might really do some damage to Sydney real estate prices.

I'm going to go off and do another "rates dance"...

Hehehe....thats funny.

More bargaining power now!!

 

[DCA]

The interesting thing now is what the government will do..
Be responsible and do tax reform
buy more voters with tax cut and .25 doesnt do any justice and inflation will rise
and the RBA will then force to bring rate up once again.

I hope they take the responsible route and tackle tax reform.

 

[MichaelW]

The interesting thing now is what the government will do..

Costello has called a press conference for 11:30am today to make a response to the RBA rate rise. Will be interesting to see what he has to say.

Cheers,
Michael.

 

[Ace73]

Will be interesting to see how this pans out in the next few months. What if oil prices continue to rise? This will keep the pressure upwards on inflation so using the RBA thinking are they going to keep on raising interest rates to try and keep inflation down.
It was touched on before about the very real risk of stagflation, used to describe a period of high inflation combined with economic stagnation, unemployment, or economic recession. I can't see oil retreating anytime soon unless there is a major downtown in the worlds economy ( a real possibility if oil prices spike higher due to war in Iran/Nigeria).
So I think the property downturn has a long way to run. It hasn't even started in WA yet, still a raging bull market. Maybe with this interest rate rise people will thinking twice before offering 10-20k above the asking price and start putting in lower offers.

 

[TheBacon]

I hope they take the responsible route and tackle tax reform.

I hope so too mate, but my subjective reading of Costello's statements, the look on his face and body language when questioned about reform lead me to think that the headlines will read;

"COSTELLO BRINGS TAX CUTS!!!"

not

"Tax Reform"

Getting more cynical by the day

TB

 

[DCA]

I hope so too mate, but my subjective reading of Costello's statements, the look on his face and body language when questioned about reform lead me to think that the headlines will read;

"COSTELLO BRINGS TAX CUTS!!!"

not

"Tax Reform"

Getting more cynical by the day

TB

People will pay in the long run if Costello bring tax cuts, I hope it is not the case, if he want to be the PM in the future he need to take a tough stand now and do Tax Reform

 

[TheBacon]

if he want to be the PM in the future he need to take a tough stand now and do Tax Reform

IMHO he'll never be PM. But, IF Howard retires (I'm betting he doesnt, but rather dies in office aged 90 or loses an election - which seems more likely at the moment?), he will be - but not till then.

So - based on the thought that he will never be PM he should try to make a lasting mark on the nation in another way - through tax reform.

Unfortunately I doubt this will happen - but my fingers are crossed.

TB

 

[flatout]

That "all time" low (lowest in about 40 years) was actually about 4.5 years ago (late 2001 / early 2002).

Since that time - and before today's rate rise - the the cash rate had increased from 4.25% to 5.50% - so up almost 30% (now it is up 35%).

I disagree that because rates were low (as you can see they weren't that low) that they had to go up. They went up owing to economic factors. If the economic factors had been the other way, they would have fallen.


Mark

Mark, yes you are right about the lowest point in interest rates. I was making a general reference to the historically low rates so far this decade which I personally felt were unsustainable at that level. Interest rates could have gone down but to my basic economic understanding none of the economic indicators pointed to this and nor did the analysts tip it. So I felt that I was on a pretty safe bet fixing my rate. With rising fuel prices driving inflation and the latest CPI results of 3% (the RB's upper tolerance level) a rate rise was inevitable IMHO. Why, because with war in Iraq, trouble brewing in Iran and increasing unrest throughout many of the oil producing arab nations, I think we'll see fuel prices go up another 10 cents at the bowser before it settles. In fact I'm tipping another rate rise before the year is out and if my IP loans weren't already fixed, I'd be doing it now.

Flatout

 

[MichaelW]

Hehehe....thats funny.

More bargaining power now!!

Looks like we might be right my friend! The media is already talking about how this will cause Sydney prices to tumble:

http://finance.news.com.au/story/0,10166,19010905-462,00.html

For Sydney, our assessment is that any modest recovery that had been occurring will now stall - and it is now likely that house prices will fall by up to another five per cent for 2006

We can but hope... I'd like another 5% in my pocket when I buy!

And here's a link to the full statement by Ian Macfarlane of the RBA today:

http://www.rba.gov.au/MediaReleases/2006/mr_06_03.html

Cheers,
Michael.

 

[kph]

Not sure if its my puter but the font is tiny and I can't read it.

Maybe I need glasses.......