澳洲Australia property RBA annoucement | Sydney


在澳大利亚 Hi everyone, After months of searching for my first IP I believe finally have the corage to put in my first offer. I would love some feedback Property: Duplex Asking price: $239,000 I believe it is worth $225,000 to $230,000 My Offer: $218,0 I am in Melbourne. Would like to buy properties interstate. How difficult is that to manage these properties. Any advise. 评论 Do you mean manage to find them or manage as in property manager? 评论 Manage to find a good property manager 评


Up another .25 points.

I suppose we all expected this though. ?  

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Yep,

The markets had all factored it in already and my vote was that they would raise rates this month. But it still does hurt a bit. I've budgeted for some rate increases but that's a few in a row now and they are starting to bight. Each 0.25% increase adds about $4K a year to my interest bill so they do hurt.

Ah well, I think it will hurt some of the stretched home owners out there more than it will me. At least my $4K increased interest is 100% deductible. Gotta feel sorry for them, not everyone is as financially savy as the members of this forum.

Cheers,
Michael.  

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CBA put my variable portion up to 7.09 in August, waiting to see if they will do so this time.
Not massively concerned about it just yet though..  

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I wonder what it will do to the housing market in Sydney.

I am seeing a few more mortgagee sales....  

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The rate rise certainly won't be much fun for homeowners.

However, as an investor I'm not too worried, as I believe that rents (and rental yields) are going to increase at a faster rate than interest rates in the future. Some commentators have even suggested there may be downward movements in interest rates next year.

There seems to be strong upward pressure on rents in nearly all property markets around the country, so basically I think any interest rate increases will be outweighed by continually-rising rents.  

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I don't see how rents can go up just because rates go up, not in country areas anyway. Wouldn't we have to see wages go up first. I havn't seen rents rise in 2 years on the mid north coast. I would imagine out west in drought areas it will be longer.
Robo  

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Well when the investor has to pay more to finance his IP after a few raises the cost eventually will be passed on to the renter... This rate rise doenst really affect me since im on a Fixed interest rate for my IP and after my tennants vacate in the coming months I will be increasing rent very slightly. Im hoping it will help me actually in grabing a nice bargain IP somewhere else... hopefully!  

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I am aware that you can negotiate a lower interest rate when applying for a "new" loan.

But can I negotitate a lower interest rate with my bank if I have only been with them for 1 year?  

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Hi Robo

If higher interest rates means less investors and less new dwellings then rent pressure naturally builds on the scarcity of rental stock. This is already evident with tightening vacancy rates around the country. My personal expereince is that I am getting a higher calibre of tenant which means that for some people they might have the same to spend but are getting less for their money. Others might compare mortgage repayments and see rents as relatively affordable.  

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tigerGT said: ↑
Well when the investor has to pay more to finance his IP after a few raises the cost eventually will be passed on to the renter... This rate rise doenst really affect me since im on a Fixed interest rate for my IP and after my tennants vacate in the coming months I will be increasing rent very slightly. Im hoping it will help me actually in grabing a nice bargain IP somewhere else... hopefully!Click to expand...
How do you pass it on?

Surely the rental market dictates the rent you recieve and this operates independently of the RBA rate.  

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Well this is the third rise of 0.25% this year. I have 5 IPs and 8 tenants (some are house & granny flats).
For those whose leases are expired and have been going month to month, I am instructing my PM to give 60 days notice of a rent rise. Only $10 in most cases (I'm guessing not enough to make tenants go to the trouble of moving) but still it is $80 per month more income even though I will be paying $140 per month on all of them.
Same thing happened when I got Land Tax bills last year - all the rents went up. (I'm sure that PM's all around the country will be getting this same message from Landlords).
It all comes down to user pays in the end.
:eek:  

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I put my rents up a wee bit every 6 months to try and keep up with increasing overhead costs, including interest rate increases, council rates and water rates.  

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Simon said:
How do you pass it on?

Surely the rental market dictates the rent you recieve and this operates independently of the RBA rate.Click to expand...
How I see it is this:

Everyone needs a home. The supply is pretty much limited and vacancies are low.

If you haven't already bought, you have a choice:

(i) Rent
(ii) Buy

If interest rates rise then buying becomes relatively more expensive than renting. So some of those at the margins will stay renting rather than buying.

At this time, let's assume that the number of homes rises in line with household formation, so supply is effectively fixed. So it's the same number of houses involved.

When fewer want to buy, more people rent.
When more want to buy, fewer people rent.

If there are fewer homebuyers chasing the same number of houses for sale, then prices will drop.

If there are more renters chasing the same number of houses for rent, then rents will rise.

An interest rate rise makes buying less attractive and renting more attractive. Very low tenant vacancies must put pressure on the rental market, forcing rents (and especially yields) up.

Once house prices have stagnated (especially in first homebuyer areas), while interest rates remain steady (or fall) and wages grow then buying will appeal to more. Every decade or so you get a year or two when rental yields are about the same as interest rates. Renters realise they can buy for little more than what they're paying in rent so buy they do (assuming they're working and can get finance). So you get a property boom for a while and the situation will reverse (ie dropping rental yields and spiralling house prices).

Peter  

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Thanks Spiderman....that was nice and simple and clear for me to understand. Happy with that!:)  

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sailor said:
Happy with that!:)Click to expand...
Thanks sailor!

And I should have added that the above also explains why government first homebuyers schemes are all a big con - strangely enough the chief beneficiaries are (i) politicians' relection prospect (ii) sellers, (iii) financiers, (iv) estate agents and (v) renters, probably in that order and everyone but the buyer and the taxpayer!

Peter  

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Spiderman said: ↑
How I see it is this:

Everyone needs a home. The supply is pretty much limited and vacancies are low.
edit
If you haven't already bought, you have a choice:

(i) Rent
(ii) Buy

When fewer want to buy, more people rent.
When more want to buy, fewer people rent.

IfPeterClick to expand...
Very good Spider.

One thing to add.

There is a lot of talk about rents rising right now.

Not just here, but in the mainstream media like ACA, daily newspapers and even ABC radio.

I suggest maybe that with so much talk about it, this will make it a lot easier for landlords to raise the rents.

Self fulfilling prophesy??
Well maybe to some extent.:)  

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Spiderman said: ↑
Once house prices have stagnated (especially in first homebuyer areas), while interest rates remain steady (or fall) and wages grow then buying will appeal to more. Every decade or so you get a year or two when rental yields are about the same as interest rates. Renters realise they can buy for little more than what they're paying in rent so buy they do (assuming they're working and can get finance). So you get a property boom for a while and the situation will reverse (ie dropping rental yields and spiralling house prices).Click to expand...
Peter,

Yep, I agree. In fact I wrote quite a bit around this some time back. I called it the "tipping point". i.e. when it becomes as cheap to buy as rent then renters become buyers. I extended this to suggest that since buying gives you access to capital gain and renting doesn't, then there is probably a "premium" that buyers are willing to pay above renting. I wrote it all down in a document and called it my tipping point hypotheses. I still contest that there is an element of truth to this though other externalities also come into play which may impact its direct applicability.

Here's the original thread:

Tipping Point Hypothesis

Might benefit some of the newer members who haven't had a look at it as yet...

Cheers,
Michael.  

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Hmmmm,,,
Don't necessarily agree that renters automatically switch to being buyers when the rents come close to equivalent mortgage repayments.

Many renters are affluent and have great cashflow jobs but there is the small question of the deposit.

If you have developed those bad spending habits which include not saving a penny, and living up to your income ( and usually beyond) then unless you have generous parents who can help out with the deposit, I'm not sure how you can make the transition.

I know real people who are like this...... 2x 6 figure salaries and no savings. Scary to see.

kp  

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Is that 8 rate rises in a row now :confused:  

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I was reading the historical rate changes on the RBA site.

In the "Recession We Had To Have" in 1994, Keating raised rates as follows:
- Rates stayed at 4.75% for a year for Jul 93 - Jul 94.
- 0.75% increase in August 94
- Further 1.00% increase in Oct 94
- FURTHER 1.00% increase in Dec 94
- Hold rates at 7.5% for another 18 months after that.

WOW! That's 11 rises in 5 months. No wonder the housing market went down the toilet!

- Dave99  

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