Australian (ASX) Stock Market Forum

Interest rates - where are they heading?

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either these people are not borrowing from aussie banks, or they are borrowing from overseas banks at low 1% rates, or not borrowers at all...
look at this one, paid $225,000 above the quote...for an adjoining one bedder, knock the walls out and join the two flats together...

deep pockets is an under statement

appears outrageous to me....but also funny....in a way...
higher rates are not showing up as lower house prices....
so is there another explanation for this subject ?

https://www.aussiestockforums.com/forums/newreply.php?do=newreply&noquote=1&p=546745
 
kincella said:
either these people are not borrowing from Aussie banks, or they are borrowing from overseas banks at low 1% rates, or not borrowers at all...
Click to expand...

The stats don't add up :confused:

Home loans fall for the fifth straight month,
Increase supply,
High clearance rates,

Clearly two things are going on if in 60 days loans haven't caught up with sale figures.

1/ Cashed up investors & owners with "money on the sidelines" are coming in post GFT liquidation. probably stock money.

Or

2/ Rudds panic and loosening the restrictions on foreign ownership has opened the food gates. Removing property from its primary use, shelter for Aussie citizens, and has become the place for cashed up new millionaires from the north to invest in.

Another Rudd inquiry and rushed decision coming in 6 months?
 
Up. My view is up based largely on 3 factors;

1. House prices. We have laxed laws and now as previously mentioned we have foreigners buying up and consequently driving up prices. Compounding this problem is the drop in the demand for home loans, which has a flow on effect on the construction of new homes which consequently adds further pressure to the housing shortage we have. The shortage will further push up house prices. Can someone tell me if the first home buyers grant applied to newly built homes? ...i recall reading somewhere it didnt but i'm not sure. IF it didn't, it was bloody stupid policy by Kevin.

2. Commodity Prices. In the short term-medium term I suspect commodity prices to rise however it'll be steady and slowly.. China's meant to be incrementally revaluating its currency hence the higher future rates. Theres also the disheartening talk of a bubble; some say its real.. We'll see.. I need to look at some raw data before i can offer any real judgement+ ask more people in the know (lucky for me there are a couple of economics lecturers who specialise in China).

3. Labour Market+ Trend growth; Target growth should be around 3% which is the norm for aussieland and we have a rather robust labour market. So it'll mean our rates will be ATLEAST be in sync with the normal times.. which i think is arouund 4.75%.
 
Re: Interest rates - business vs property

Hi,

Any views on the effect of changes to interest rates and business investment compared to the property mortgage market?

I would be assuming that the more sensitive of the two to interest rate change is business investment as it usually involves more risk?

Only trouble is, more recently the risk associated with property has increased with the high leveraging I'm hearing.

Cheers,
Algis
 
Thanks Julia.

I wasn't aware that banks were abiding by this Basel II agreement, which sets out banking capital adequacy according to risk. And business investment apparently is 5 times more expensive for banks to fund, hence their interest in the mortgage market.

I am reminded by the high interest rates during and after the boom of the late eighties. There were a lot of poor businesses that got eliminated (probably a good thing) after being hammered by the rates and Oct87 and reducing tariffs. Housing dropped off as well. I'm not sure who got worse off?
 
sageintraining said:
Can someone tell me if the first home buyers grant applied to newly built homes?
Click to expand...

Until last year, an extra $7,000 was on offer for first home buyers who bought a brand new house, although the house-and-land package companies quickly swallowed this up through inflated prices.


**********************
I DIY manage with Rentwise.
 
sageintraining said:
IF it didn't, it was bloody stupid policy by Kevin.
Click to expand...
The grant was introduced by a Liberal government lead by John Howard, not the present Rudd Labor government.

The grant was intended to offset the impact of GST on house prices. However, given the rapid rise in house prices over the past decade the grant is now inadequate to offset the GST impact on housing.

Personally, I'd gladly see the end of it along with the various other bubble-creating mechanisms.:2twocents
 
Smurf1976 said:
Personally, I'd gladly see the end of it along with the various other bubble-creating mechanisms.:2twocents
Click to expand...
Get rid if it along with property transaction taxes such as stamp duty.

Cap negative gearing and take CGT back to CPI indexation (perhaps capped at the corporate rate).
 
Official cash rate 4.5% - anyone want to suggest who is going to be the first of the Majors to raise their rates?? Variable rate approx 7.45% residential lending.

My money is on ANZ :)
 
I was going to say the NAB, but looks like we were both wrong

The Commonwealth Bank was first to follow the Reserve Bank, lifting its standard variable rate rate from 7.11 per cent to 7.37 per cent.

Economists had been tipping the rate rise, with the market pricing in a 69 per cent chance that the Reserve Bank board would hike its cash rate by 25 basis points.

Rates now back at "average levels"
Click to expand...
 
CRIKEY ! CBA gone already !! Nothing like thinking about it ?? Notice they snipped .26% as well ! Took them all of 29 minutes to get it out in the market place too !
 
Unless something unexpected happens, this will be the last RBA rate change for a while I suspect.

Post election though may be a whole new ball game.
 
trainspotter said:
CRIKEY ! CBA gone already !! Nothing like thinking about it ?? Notice they snipped .26% as well ! Took them all of 29 minutes to get it out in the market place too !
Click to expand...
Let's see if it gets passed on to term deposit rates. The last two rises haven't in most cases, and the longer term deposit rates are actually lower than they were a couple of months ago.

What sort of rates do the banks pay if they borrow on the international market?
 
Julia said:
Let's see if it gets passed on to term deposit rates. The last two rises haven't in most cases, and the longer term deposit rates are actually lower than they were a couple of months ago.

What sort of rates do the banks pay if they borrow on the international market?
Click to expand...

Well i think that would be LIBOR.

Current and recent.

CanOz
 

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