What do you think the Reserve Bank will do with interest rates March 01 2005?

[always_learning]

Since Acey is AWOL I thought I should step in and post a poll. Since the RBA has been making lots of noise about moving up (0.25*2)...so are they just putting the fear of god into everyone or are they serious this time?



So, where do you think interest rates will go in March 2005 and why?

Cheers,

Aceyducey
...oopps I mean AL

 

[Peter 14.7]

Hi All and AL

Thanks for the poll.

I voted up 0.25% because they pretty much have to after all the bravado and it is unlikely something will change in the next week to give an out.

And , this will be a good thing.

We often bag the RBA but IMO their action with rates in realtion to IP market simply "culled the herd (mentality)."

Mid 2003 market was simply illogical. Hard to believe we are now almost mid 2005 and a lot has changed.

But what would have happended if they had not raised rates??? A crash not a correction which is bad for all.

If the RBA raise rates next week it is because of what they are trying to manage in 6 months time, not now. The same logic will apply when they drop rates.

Peter 147

 

[<KS>]

Exactly what Peter said

<KS>

 

[Bill.L]

Hi all,

I also agree with Peter.

They have to do it just to show they are moving them. There may only be one .25% rise though.

bye

 

[quiggles]

I'll have one of them too, with the rider that we'll see another rise in April as well.

[Deputy sherrif drawl]"We ain't fooling guys, throw down your loan applications and come on out with your DSRs held high!!".[/Deputy sherrif drawl]

PS - shouldn't you have closed the poll on 2 March? There's an awful lot of people who'll be able to get it right on 3 March.

 

[perky29]

I will say no rise, just to be contrary. Oh, and I think the RBA is just making noise....

 

[spark]

Voted +0.5%: The pubic opinion preparation was too massive.

 

[simonjulie]

I think it is time something happened or we'll have nothing to complain about.
Bring it on "A change is as good as a holiday". every .25% means around 9k pa for me. Oh well, there goes that holiday
Simon

 

[buzzlightyear]

Their bluffing.....no rise in March....

 

[always_learning]

PS - shouldn't you have closed the poll on 2 March? There's an awful lot of people who'll be able to get it right on 3 March.

I wasnt sure the thread is closed after the poll has ended or just the poll, I though there may be extra comments after the event. It seems someone has fixed the closing date of the poll now.

 

[BUNDY]

No Rise, John Howard would cop too much of a backlash.

BUNDY

 

[Peter 14.7]

No Rise, John Howard would cop too much of a backlash.

BUNDY

Sorry but the RBA is independant and John has gone to great length to say "he" does not see the need for a rise but hey "he" is not the RBA.

It is total win/win for the GOv. Nor ise and they say see we kept them down. Rise and they will say "hey dont blame us" blame the strong economy which BTW we made.

John Howard is one of the canniest pollies by far.

When Jobs go down again he will say see you cannot have it both ways.

Peter 147

 

[Merovingian]

No Rise, John Howard would cop too much of a backlash.

BUNDY

I doubt there would be a backlash even if the RBA increased interest rates by 1% in March.

I think most people didn't buy the "low interest rates" argument that Liberal used for the election — people voted Liberal because they believed that Labor would just get in and start messing things up.

 

[BV]

I voted unchanged although an increase would be good.
It would stop people from buying IPs and will bring rents up to sensible levels.
I heard on the radio this morning that the Vacancy rate for Sydney
is down to 2.6% and its dropping. Time to put those rents up...
cheers,

 

[Peter 14.7]

I voted unchanged although an increase would be good.
It would stop people from buying IPs and will bring rents up to sensible levels.
I heard on the radio this morning that the Vacancy rate for Sydney
is down to 2.6% and its dropping. Time to put those rents up...
cheers,

Hi BV

So Right. Excellant Point.

As professional investors, we here at SS should see all change as an opportunity to benefit.

The rents here in Sydney are so low they bear no relation to the purchased price. IMO Rents are not going to rise just yet but in 12 months they will.

The Land Tax debate/debacle is starting to bite.

Peter 147

 

[quintets]

No change - bond market says no.

AL, good poll.

IMHO, I think it will remain unchanged. Over the last nine rate rises back to 1999, the two year bond yield was, on the day an average of 83 basis points above the cash rate when rate rise occured. Right now, it's only about 25 basis points above the cash rate. There was one time when it was 28 basis points above and it was the rate rise just before the 2000 Olympics. That might just have been a special case.

Peter147, I agree that the RBA has been jawboning alot right now. But given they don't have to release minutes, I don't think they worry much about whether they have credibility with the public over consistency. They could still say "no change" and they would just word their statements about the final economy to supercede all previous statements and could probably be argued as reasonably consistent.

That said, I agree that we NEED a rise. Rental reality(tm) needs to kick in and if there's no rise, it will just take longer and too many IP Professionals will be spending too much time chasing too few good deals. I chat to agents in country towns and they still talk about the city slickers who come around looking and push up prices? Who's buying? The johnny-come-lately's to the world of IP? A rate rise would take the last bit of speculation out of the market and accelerate prices coming down to meet where rents are.

The important thing is to have a plan regardless of which way the cookie crumbles.

Speaking of cookies, has anyone tried the new chocolate-chilli Tim Tams? It sounds very Mexican.

Jireh

 

[quoll]

I chat to agents in country towns and they still talk about the city slickers who come around looking and push up prices? Who's buying? The johnny-come-lately's to the world of IP?

Good point quintets

Over here in little old Adelaide the prices are still going up, must be those darn city slickers pushing the prices up. I'm going back to my rocking chair on the porch.

Cheers
quoll

 

[quintets]

Good point quintets

Over here in little old Adelaide the prices are still going up, must be those darn city slickers pushing the prices up. I'm going back to my rocking chair on the porch.

Cheers
quoll

Quoll,

Gosh...Adelaide? country town? the definition of a country town seems to have changed a bit.

Jireh

 

[jsh1]

The RBA Comments alone cause reactions.

Whilst the RBA have indicated a possible future lift in rates, their comments alone have significantly impacted the property market.
I'm not saying they will not increase rates down the track, but I feel it may be too soon given the easing which has already occured in property markets across the board.
The previous 2 rises some time ago, really put the brakes on the property market, would another 1 or 2 rises seriously hurt what is already considered a slowing economy?

 

[always_learning]

My feeling is that after all the warnings given, that the RBA will raise interest rates 0.25 of a percent this month, if they dont they will loose credibility, you can only give some many warnings before people stop believing. However the next 0.25% will not happen for a long time and it will be held over our heads like a axe waiting to fall.

My gut feel is that another 10% can come off the Sydney property market and +0.5% will do it! I've been watching the Pymble (middleclass upper north shore) market for a while now, houses that were topping $1M in mid 2003, are now selling for $850~$900K I think these can fall to $750~800K without much effort or even panic. Unlike the high rise market vast majority of owner occupiers they didnt pay full price (most purchased many years ago) so if they buy and sell on the market they havent lost anything except a one time theoretical paper gain.