rba's emergency meeting, page-20

  1. 2,677 Posts.
    nickyjames, speaking to some one at a party over the week end and they have a 10 year mortgage with the CBA fixed at 5%. I thought she may have worked there and concessional. Get it some 3-4 years ago. If you can get 5% fixed for 10 years, make things very very easy on home owwners.

    may you be so lucky you have a 'I have to pay tax on the income from my property investmnet'.

    This is were professor Keen's use of raw data and his lack of logic in conecting the dots. Keen exppects extremely low interest rates ie close to zero. This would assume very low mortgage rates as well say 2-3%. By selling today, and renting you are better off and can technical buy the same house for 40% less in the near future because everyone will sell because they cant afford. But with extremely low interest rates, renting is more expensive and even bill Moss (ex-macquarie bank) indicated that he expected cashflow psoitve properties to be the norm. Professor Keen also said the proceeds from the house could be invested at zero%.

    If rates are low in order to keep poeple from having to sell the 40% expectation accross the board wont materialise, there will be some forced sales, but not as many as had rates remained 7-9% and given the shortage of housing a strong rental market.

    The other factor is sharing actually reduces the overall burden and to a certain extent allows higher rentals.

    Please argue with my logic as I aint a professor
 
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