RBA to cut rates by 100bp in December
- Thread starter MichaelW
- Start date
My bet is at least a 1% reduction in December. They want people to maintain their normal spending habits for the Christmas/New Year period. Also the RBA don't meet in January so they are making a decision for a 2 month period. Maybe a 1.5% cut is not out of the question like the Bank Of England. The Aus government were talking about a second stimulus package this morning. What greater stimulus could you get than a 1.5% interest rate cut.
All I want for Christmas is a 6% fixed rate for 10 years. Lock it in Eddie!!
All I want for Christmas is a 6% fixed rate for 10 years. Lock it in Eddie!!
... unless you're in the 20% who fix @ the right time 
in which case your repayments look more like $3500 $3500 $3500 $3500 instead of
$3400 $3650 $3800 $4000 etc
Regards Jodie
in which case your repayments look more like $3500 $3500 $3500 $3500 instead of$3400 $3650 $3800 $4000 etc
Regards Jodie
Oh and just to be different, 125bpts! or 1.25% (well I can dream, what's the harm, it worked for me last time!)
... unless you're in the 20% who fix @ the right time
$3400 $3650 $3800 $4000 etc
Regards Jodie
Yes of course. I just wanted to illustrate that it's not always about saving money, hence in my example fixing costs more.
ianvestor,As a recovering insomniac,
I know many wouldn't put a price on a good nights sleep -SANF is why we fix. We still try to time it right of course though!
... unless you're in the 20% who fix @ the right time
$3400 $3650 $3800 $4000 etc
Regards Jodie
Hmmm... Well I was smart for 1.5 years - 3 years fixed @ 7.2% in April 2007.
Increasing rates is usually referred to as 'the brakes'.
Dropping rates is the accelerator
Yes, of course! Pedal to the metal baby!
Great comments in this thread... it was the best of times (for property investors on variable rates) it was the worst of times (for the economy, borrowers already locked in with fixed rates and self funded retirees relying on bank interest income)
RHG haven't come to grips with the recent 75 basis points drop and here you guys are talking about another 100+ points drop in 3 weeks time...the hard-drive on RHG's mainframe. They'd be quicker if they used an abacus.
Big opportunites for investors to target high yielding investment properties at the moment. My 7%+ gross return on unit in Auburn is starting to look pretty good.
Maybe this is why Steve McKnight is so eager to present his new seminar to investors (as purchasing multiple properties that will shortly become cash-flow positive is now a very viable strategy).
RHG haven't come to grips with the recent 75 basis points drop and here you guys are talking about another 100+ points drop in 3 weeks time...the hard-drive on RHG's mainframe. They'd be quicker if they used an abacus.
Big opportunites for investors to target high yielding investment properties at the moment. My 7%+ gross return on unit in Auburn is starting to look pretty good.
Maybe this is why Steve McKnight is so eager to present his new seminar to investors (as purchasing multiple properties that will shortly become cash-flow positive is now a very viable strategy).
As a recovering insomniac,
Correct. SANF is the prime objective for fixing. If rates drop then thats your tax deductible premium paid for SANF.
0.5% if banks dont need another cut
0.75% if they do
Thats assuming we dont get more Aussie companies falling over (a la ABC Learning).
I just want Adelaide Bank to announce the last cut at the moment
0.75% if they do
Thats assuming we dont get more Aussie companies falling over (a la ABC Learning).
I just want Adelaide Bank to announce the last cut at the moment
Hey Sparky,
Why the need to "concentrate" hard? Clapping hands worked so well last time!!!
Have you sold one finally then?
Why the need to "concentrate" hard? Clapping hands worked so well last time!!!
Have you sold one finally then?
I'm with you on the 125...
YoYoAnyone else with me?
No rule - just 18 years of history which shows that interest rates have always changed in multiples of 25 basis points.
http://www.rba.gov.au/Statistics/cashrate_target.html
Anyone else with me?
yes, i'm also confident of a 125bp cut mainly due to the RBA not meeting in january as someone else mentioned.
What is 1% worth...?
Apparently every 1% drop in IRs adds $18 billion to the economy. ( I'm not sure if that's the pure saving on interest payments or if there are some other "accounting" factors ) ....In a nation where the pollies think $20 billion is a large surplus ......
LL
Apparently every 1% drop in IRs adds $18 billion to the economy. ( I'm not sure if that's the pure saving on interest payments or if there are some other "accounting" factors ) ....In a nation where the pollies think $20 billion is a large surplus ......
LL
I worry less about what a 100bp drop means to me than I do that a further 100bp is further evidence the RBA isn't convinced we can avoid being impacted by the global recession (nor do I as it happens....we are a physical island not an economic one).
The more interesting question is "What happens to my yields/CG in the event we have an 18 month recession?".
The more interesting question is "What happens to my yields/CG in the event we have an 18 month recession?".
Just read in today's Financial Review that there is a 90% chance that interest rates will drop by 1% in December.
