What do you think - Interest rates may have peaked

Time to end the doom and gloom - it's time to buy. Actually, I bought another IP about two months ago to avoid the rush of the herd.

With interest rates having peaked and now dropping plus the exemption of Stamp Duty for FHB (up to $500k) what do you reckon happens next?

I agree with Michael 9:00 - wake-up time :D So, the pessimistic sheep had better get a move on.

Cheers,

Bazza
 
Bazza said:
Time to end the doom and gloom - it's time to buy. Actually, I bought another IP about two months ago to avoid the rush of the herd.

With interest rates having peaked and now dropping plus the exemption of Stamp Duty for FHB (up to $500k) what do you reckon happens next?

I agree with Michael 9:00 - wake-up time :D So, the pessimistic sheep had better get a move on.

Cheers,

Bazza
Click to expand...

Bazza, I totally agree with you. I know a lot of smart investors have bought a lot to take advantage of the slowing market. I could not squeeze out any credit. I want to sell two of them which got substantial capital gain. Unfortunately, the rate cut would make those bargains go too quick.
 
josko said:
It is the beginning! No time to be disappointed. There will be another if not next month, then the month after. It's been time to buy for a while now as I said...good times ahead.

Regards JO
Click to expand...

I am worried about the economy. 0.25% will not be able to stir up business confidence, people's confidence, and market sentiment. The sharp slowing economy will not do any good to the investors and the market. Apart from interest rates, all other factors indicate the Australia property market is under supply (new constructions, employment, economy, rental, new building approval etc).
 
MichaelWhyte said:
Skuzy,

The RBAs primary mandate is to keep inflation in the 2-3% band. Their secondary, and not explicitly stated, one is to keep the economy ticking along nicely. Now that all the "lead" indicators suggest inflation is under control then they can start easing interest rates so that they uphold their secondary obligation to stop the economy falling in a heap. In time, the lag indicators will show that inflation is under control and in fact that they might have waited too long to start easing.

The deputy governor himself pretty much made this argument recently. If they waited for inflation to actually fall back inside the band then they would be way too late in easing. They acted pro-actively in advance of rising inflation and raised and will act pro-actively in advance of falling inflation and ease. Its a tough gig being a reserve bank as everyone has the benefit of ridiculing you with perfect 20/20 hindsight whilst you have to act in a world of uncertainty predicting the environment 12-18 months ahead. A very tough gig...

I reckon it will be 1-1.5% of ease over the next couple of years.

Cheers,
Michael
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Hi Michael. current international and domestic environment will change anything to the inflation. For example, we have seen the benchmark petrol dropped significantly, have we seen the pump drop significantly, NO. I reckon there are several reasons, profitering and also potential fear of the slowing economy condition make them to gain as much as possible in the first half of the year. Therefore, only booming economy can settle the inflation. The sharp cut is needed to bring up the investment confidence and people's confidence. I do not feel 0.25% will make any changes to people's mind. It only indicates that RBA is knowing and going to reduce rate. It did not reflect the sharp slow economic condition.
 
diadakdelight,

Does your guarantee at the beginning of this thread come with cash rebate? :rolleyes: :D

Hey at least you had enough guts to voice your thoughts!

Regards Jodie
 
i think krudd is keeping the other .25% cut for himself for the working families of australia for CRISTMASS !!!!.
just to show he hasnt lost touch i bet!!!
 
TheAnalyst,

I agree. More depressed sentiment reporting out today:

http://business.smh.com.au/business/economy-in-doldrums-20080909-4clt.html

SMH said:
Pessimists outnumbered optimists for the eight consecutive month in August, leaving business confidence levels at lows not seen since the aftermath of the September 11, 2001 terrorist attacks in the US.

Other data out today showed retail sales and new home loans were flat in July, underscoring the anaemic state of the economy.

The National Australia Bank's business confidence survey registered minus-7 in August, compared with a minus-9 reading for the previous month as high interest rates and rising prices dimmed the outlook for the construction, finance and business services industries.

Negative results reflect more pessimism than optimism among respondents polled by NAB.
Click to expand...
Cheers,
Michael
 
pendo said:
And this just in from Alan Kohler

House prices need to fall. [/url]
Click to expand...

They may need to but, will they? Specially when 70% of all resi housing being PPOR and 50% of that being totally paid off. And that's the main difference with the stock market. I believe that resi properties won't go up significantly till nominal wages don't go up first. The most probably scenario is high yields for some more years to come.

Without having sufficient inflation increasing nominal wages which in turn will increase current price of resi property (At least in nominal terms), there may be other ways to achieve the same increase though in real terms. e.g. by providing:

1- 40 to 80 years home loans
2- Allowing partnership between natural persons and SMSF to adquire PPOR
3- By providing 40-80 years leases of resi property

BTW, this is not something I just made up. These is already happening in some countries out there.

Cheers,
James.
 
I feel shocked by today's RBA's decision by cutting 1%. What a stupidity they have made!

They should have cut the rates by 0.5% in Sep and 0.5 in Aug...

A bunch of fat cats without brains.
 
I must say I was shocked too. They must really think the economy needs plugging.

I am also shocked the banks jumped in straight away to say they would cut by .8%. I was expecting .5% MAX!

Does anyone out there feel like they are on a rollercoaster?:confused:

Regards JO
 
Yep you got that right, it's a roller coaster going in reverse. I'm realy confused:confused: with the RBA, what are they trying to achieve or are they confused them self?

I just have a feeling they know something that we don't & has shocked them that they needed to make it a 1% cut.

And the banks " We can not promise that we will cut our interest rates:rolleyes: " , & what did they do, instantly agreed to cut .8%.:eek:

Like you said, it's a roller coaster ride, hold on everyone enjoy the ride that never ends.:D


George:)
 
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