Post to Facebook on 20/10/2018 at 2:06 AM
Commenting on “How your Uber Eats history could affect your chances of your future home loan”
https://www.theage.com.au/business/the-economy/sydney-melbourne-property-prices-face-20-per-cent-drop-says-amp-20181019-p50am3.html/
I always believe in my prediction about the magnitude of the price decline. It is good finally to read from the so-call expert that Sydney and Melbourne property prices face 20% drop.
Should the Reserved Bank of Australia (RBA) further reduce cash rate? In my opinion, the answer is definitely not. In fact, the interest rate should go up, much more than double.
Unfortunately, bank interest rate, either for loan or deposit is completely out of syn with the RBA‘s decision. The reason for the banks to increase the loan interest rate is the cost of money from overseas is high, and they cannot attract enough deposits from the local as well.
Who would put money in the bank to get pittance from the interest paid? Many potential home buyers just can’t grow the deposit because most banks offer from miserable 0% to less than 1% interest.
There is no motivation to save for a deposit, and those belong to this category will spend the money on disposable items, cafes and restaurants, or lifestyle such as cheap overseas travels that benefit the destination countries.
Many people do not understand the cost of owning and running a house. Those who live from hand-to-mouth should not consider or ready to own a house, unless they can improve their income position. They are vulnerable to face bankruptcy if mortgage interest rate is to increase or arrival of economic downturn.
Investors look for either capital growth or income stream. Many ordinary wage earners still believe in investment gurus who advise their followers to buy properties that rely on negative gearing, which can offset their tax obligation. My suggestion to small time investors who do not have a big wage packet NOT to take this option, because the future governments may not allow negative gearing as an investment strategy.
Not all investors look for capital growth. They want regular and acceptable rate of return. Negative gearing is not their preferred option, and worse still they may not have the time to realise the capital growth. A reasonable interest rate increase will encourage this group of people to switch from property investment to cash in the bank.
I may not have qualification of the RBA governor or possess a string of degrees of the financial and economical experts, but I have a rational mind to put forward my own sound and logical hypothesis.
Thank you for reading.
Commenting on “How your Uber Eats history could affect your chances of your future home loan”
https://www.theage.com.au/business/the-economy/sydney-melbourne-property-prices-face-20-per-cent-drop-says-amp-20181019-p50am3.html/
I always believe in my prediction about the magnitude of the price decline. It is good finally to read from the so-call expert that Sydney and Melbourne property prices face 20% drop.
Should the Reserved Bank of Australia (RBA) further reduce cash rate? In my opinion, the answer is definitely not. In fact, the interest rate should go up, much more than double.
Unfortunately, bank interest rate, either for loan or deposit is completely out of syn with the RBA‘s decision. The reason for the banks to increase the loan interest rate is the cost of money from overseas is high, and they cannot attract enough deposits from the local as well.
Who would put money in the bank to get pittance from the interest paid? Many potential home buyers just can’t grow the deposit because most banks offer from miserable 0% to less than 1% interest.
There is no motivation to save for a deposit, and those belong to this category will spend the money on disposable items, cafes and restaurants, or lifestyle such as cheap overseas travels that benefit the destination countries.
Many people do not understand the cost of owning and running a house. Those who live from hand-to-mouth should not consider or ready to own a house, unless they can improve their income position. They are vulnerable to face bankruptcy if mortgage interest rate is to increase or arrival of economic downturn.
Investors look for either capital growth or income stream. Many ordinary wage earners still believe in investment gurus who advise their followers to buy properties that rely on negative gearing, which can offset their tax obligation. My suggestion to small time investors who do not have a big wage packet NOT to take this option, because the future governments may not allow negative gearing as an investment strategy.
Not all investors look for capital growth. They want regular and acceptable rate of return. Negative gearing is not their preferred option, and worse still they may not have the time to realise the capital growth. A reasonable interest rate increase will encourage this group of people to switch from property investment to cash in the bank.
I may not have qualification of the RBA governor or possess a string of degrees of the financial and economical experts, but I have a rational mind to put forward my own sound and logical hypothesis.
Thank you for reading.
