This is hilarious.
OK, if all these problems were all so obvious, what did you do about it then?
From memory, I think you have a reasonably high LVR ratio. If you knew about all this, did you try to reduce it? Plenty of bargains coming up? It would be good to be cashed up?
This whole debarcle only happened because hardly anyone saw it coming, otherwise it wouldn't have happened.
You should have started a post about these problems, like nonrecourse did, so we all could have averted this disaster.
See ya's.
What's obvious to some laymen LL is that the IP increases (after the fact) were feeding CPI. LL raised rent urgently (it's that or risk loan repayment arrears and mortgagee foreclosure). LL risked tenant churn by lifting rent increase as soon as possible (75% in my IP portfolio). Oil was also fueling CPI big time. The RBA (and many others) took an almost naive and ineffectual approach to fighting CPI. Nobel laurete Stiglitz, Turnbull, some academics and consultants warn against sticking inflexibly to CPI band targeting.
Why was RBA bias towards increasing IR against the perceived threat of CPI when CPI largely did not originate domestically, except the financial services sector which was fueled by the IR increases of RBA? Initially, there may be natural expediency to support the political masters' electoral spiel of inheriting an inflationary economy.
What did we do to warn others? Discussions in SS include the thread I started in early June 2008 forecasting IR has to drop when many others (incl forumites and economists) were more convinced that going forward the immediate priorities should be inflation and IR increases:
http://www.somersoft.com/forums/showthread.php?t=42870&highlight=trifecta
What else could we do beside trying to survive the tsunami of about 1.5% IR (incl independent lender increase) increases within 12 months on our IP portfolio and existing rental leases have yet to expire to allow higher rent?
Many people, including M Turnbull and John Hewson criticised the inflexible band targeting (a newspaper applied pressure with a headline 'is this the most useless man in Australia?' ) and the RBA did moderate their monetary management.
What we do have now is a more proactive RBA prepared to undo the damage and lost opportunities in 07-08 with 2% IR drops in 3 months. This is still net benefit to PIs of about 0.5% (= 2% -1.5%). It wouldn't surprise me to have another 1.5% IR drop at least to get out of this downturn period.
IMHO