Last week the Reserve Bank of Australia (RBA) made the decision at it’s monthly board meeting to leave the official cash rate on hold. That means no adjustment to interest rates this month.
But Did The RBA Get It Wrong?
It will be interesting to watch what they do with interest rates in the months ahead. Their actions will be an indication of whether this months decision to leave rates on hold was the right one or not.
At the beginning of 2008 the RBA put interest rates up twice. At the time the opposition argued that the decision to do so was wrong and a reaction to Kevin Rudd & Wayne Swan talking up inflation; citing it as the # 1 enemy to go after. What they failed to recognise was that the negative economic impact coming out of the USA had already begun to work its way through the system and here in Australia the economic slowdown was just about to bite.
The numerous interest rate cuts later in the year is clear evidence that monetary policy in the early part of 2008 was wrong.
More…
The Reserve Bank of Australia (RBA) will meet for the first time this year, next Tuesday. While it’s difficult to know exactly what they will do with official interest rates, I expect another generous reduction to be handed out; probably 1%; but certainly at least 0.75%.
More…
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Nick & Katrina Lockhart
Instead, they rely on our intimate knowledge, detailed research and common sense interpretation of the facts. As a property investor, I have walked the same path. My wife and I own multiple investment properties and continue to add at least one a year.
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Please explore these pages. Find out more about our very different approach to property investment and how it could help you achieve your family’s financial goals, just as it has contributed to ours.
Happy Investing,
Nick Lockhart
Managing Director
mrd Customer Care Program… because investing is personal
Latest news and insight
TV sound bites, market bulletins, the finance pages, chat room gossip – facts and comment come at us from all angles. Unlike you, we have the time and resources to turn this meaningless jumble of ideas into structured tangible evidence … more
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WOW, Christmas is almost upon us yet again; hasn’t 2008 come and (almost) gone so quickly? It has been a tumultuous year. The fallout from the subprime issues in the USA gave way to a credit crisis… with went on to become a global economic crisis. I believe the Australian property market is poised for good things; as clearly demonstrated in my recent Web Seminars titled “What In The World Is Going On With Property“.
NB: If you missed out on participating in one these Web Seminars you can now watch it online; click here.
The Global Credit Crisis & Property Investors
As property investors the good that has come out of the recent global turmoil has been a massive reduction in interest rates. I am now so very close to being cashflow positive across my property portfolio… and interest rates are still falling and likely to stay very low for years to come!
The downside for property investors is that lenders have tightened their lending criteria making it harder to secure funding that it was previously, in some instances. With interest rates falling, however, serviceability has been made that much easier creating opportunity for many who previously could not secure funding to now qualify.
The Global Credit Crisis & Property Developers
The impacted on developers has been massive. Companies large and small have all been affected. Many developers have gone broke or just closed up shop, others have shelved projects indefinitely and are waiting until they see evidence of investors returning to the market. Others have soldiered on but have had many new funding hoops to jump through put in front of them.
Banks have been scared to lend to each other, so regardless of whether you are an individual looking to borrow money to buy a property or a developer looking for the funding necessary to complete a project… 2008 has seen a real tightening of lender willingness.
Waterside Residential:
We have received the following update from the developer…
More…
WOW, Christmas is almost upon us yet again; hasn’t 2008 come and (almost) gone so quickly? It has been a tumultuous year. The fallout from the subprime issues in the USA gave way to a credit crisis… with went on to become a global economic crisis. I believe the Australian property market is poised for good things; as clearly demonstrated in my recent Web Seminars titled “What In The World Is Going On With Property“.
NB: If you missed out on participating in one these Web Seminars you can now watch it online; click here.
The Global Credit Crisis & Property Investors
As property investors the good that has come out of the recent global turmoil has been a massive reduction in interest rates. I am now so very close to being cashflow positive across my property portfolio… and interest rates are still falling and likely to stay very low for years to come!
The downside for property investors is that lenders have tightened their lending criteria making it harder to secure funding that it was previously, in some instances. With interest rates falling, however, serviceability has been made that much easier creating opportunity for many who previously could not secure funding to now qualify.
The Global Credit Crisis & Property Developers
The impacted on developers has been massive. Companies large and small have all been affected. Many developers have gone broke or just closed up shop, others have shelved projects indefinitely and are waiting until they see evidence of investors returning to the market. Others have soldiered on but have had many new funding hoops to jump through put in front of them.
Banks have been scared to lend to each other, so regardless of whether you are an individual looking to borrow money to buy a property or a developer looking for the funding necessary to complete a project… 2008 has seen a real tightening of lender willingness.
Seashells @ Clifton
We have received the following update from the developer…
More…
To make sense of the property market we must separate opinion from fact. Opinions will always be heard… just in greater numbers now perhaps. If you are prepared to “drill deeper” and dissect the evidence available; the facts will speak for themselves. There’s no reason for allowing the conflicting voices of opinion to keep you confused!
In the current round of Web Seminars we are offering, I highlight four key factors that are a MUST… if you expect to draw any credible conclusions.
1. Record Population Growth
2. Investors Have Fled The Market
3. Home Ownership Unattractive
4. New Construction Has Stalled Badly
More…
Residential Real Estate Prices To Drop By Up To 40%; According To Some!
A History Lesson…
The worst excesses I have seen in the residential housing market was the selling of overpriced property through the 1990’s. Many people have heard of Two Tiered Marketing… where interstate and overseas investors paid a different price to what the locals were paying.
This practice came about as a result of greedy developers flooding markets, in particular the Gold Coast with more property than there was demand for. Driven by profit, rather than demand, the result was a massive oversupply of coastal high rises and Surfers Paradise became Renters Paradise. The law of supply and demand ensured that rents fell encouraging many disgruntled vendors to sell.
More…
With the collapse of Lehman Brothers and the bargain basement sale of Merrill Lynch in the US, many economic commentators are predicting a second official rate cut next month in an attempt by the RBA to ease domestic financial conditions. Highlighting this renewed confidence, trades on the Sydney Futures Exchange indicate a 100% likelihood that rates will fall by 25 basis points on October 8th.
In all likelihood we will see higher levels of confidence return to the property market on the back of rate falls and demonstrated domestic stability. The most recent consumer sentiment figures released by Westpac and the Melbourne Institute have risen considerably during August and September, providing further evidence that market conditions are likely to improve.
With fewer buyers in the market, ABS statistics are highlighting a reluctance by developers to initiate the building of new housing projects. This may be good news for sellers, as the lack of new stock helps to underpin existing market listings with a floor price. Investors should also benefit as population growth and a general housing shortage will likely drive up rents in coming years.
Dwelling commencement figures recently released by the Australian Bureau of Statistics (ABS) show dwellings commencements have declined for the second quarter running. Construction on just 38,348 homes commenced in the three months to June, a seasonally-adjusted drop of 3.7% on the March quarter.
Source: My RPData
Billion dollar figures released this week in Stocklands Southern Gold Coast report have prompted City Hall Officials to formally announce Robina as the Gold Coast’s new CBD. The suburb is set to replace Southport after reports showed more than half of all last years commercial growth on the Gold Coast was in Robina. The strength of this growth has developers predicting that the suburb and surrounds could run out of vacant land within five years. Robina Land Corporations current project ‘The Rocket’ is set to relieve some of the commercial demand by bringing a further 12,500sqm of office space to the district.
Recent developments within the area include the expansion of Robina Hospital, Robina Town Centre, Queensland Rail Extension to Varsity Lakes and Skilled Park Stadium. With the soon-to-be built club training facility ‘Titansworld’, plus its already established shopping, residential and recreational precinct, Robina has truly become the suburb to both live, work and play. (myrobina.com.au)
Developers are flooding to semi-agricultural Gatton, 90km’s west of Brisbane, in anticipation of an influx of prison, defence and tertiary education staff as new infrastructure is built there. Trinity Group, Consolidated Properties and Brisbane developer John Narramore have acquired a 355 hectare site at Gatton in the Lockyer Valley township, and have plans for a $300 million residential subdivision encompassing 2200 lots. The project would double Gatton’s population of 9000.Source: ITP – Matusik Report, The Australian Financial Review, Page 47, 13 December 2007
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