auction results too scary to publish, page-36

nortiba, as soon as a serious correction becomes obvious interest rates will drop not rise. this has happened at the time of the GFC in 2008 in australia and has occured in USA, UK etc.

while it may be harder to access these funds people with a large deposit will be able to buy up property 30-40% cheaper throw down a 30% deposit instead of 20% and experience 4-5% interest rates.

scenario 1 buy now

cost 350k
deposit 70k (20%)
borrow 280k (8% pa fixed)
interest 22.4k
monthly repayment $2054 month over 30 years
total cost including deposit, capital repayment interest = 809.634k

scenario 2 wait for 40% fall

cost 210k
deposit 70k (now 33.33%)
borrow 140k (5% pa fixed)
interst 7.5k pa
monthly repayment $751 month over 30 years
total cost including deposit, capital repayment interest = 340.558k

If you wait for scenario 2 you should be able to increase the size of the deposit with the savings gained over the time of the correction potentially eliminaiting the mortgage altogether if the correction is over 4 years as i expect. In which case the total cost drops to 210k not a bad saving!!!