fixed rate numbers, page-3

Newie,

About six months ago there were several people on here bleating that there were a "massive" number of loans on honeymoon rates and when those honeymoon periods expired property prices were going to dive.

They quoted Steven Keen of course (whilst warmly peering at his poster on the wall).

I told them that was great because rates were going to dive and of course I had the usual "lol" posts, the attacks etc.

Didn't matter that I gave my reasoning (the interplay between US and Aus rates and monetary exchange rates, ie we follow the USA but delayed by 12-18 months), they still had a high old time lambasting me.

Well whose laughing now? That "massive" wave of honeymoon rates probably wasn't all that massive and whatever size it is those people will be exiting low rates into variable rates which are even lower.

The vast majority of residential loans in Australia are variable, the direct opposite of the USA where the vast majority were fixed at higher rates (thus they do not benefit as much from falling rates). Each drop in interest rates in Australia relieves pressure from most Australian mortgage holders.

The fact is that it is all falling apart for those who dreamed that property prices would plunge across the board. Sure they will find anecdotes about how this property had an asking price of this but sold for that but the figures haven't really budged have they?

In each quarter the drops, if they have been there at all, have been miniscule. At this point many will jump on me and say "it is coming, just wait and see!"

Well, it's not coming and it won't. The reasons have been done to death by me and others, it just isn't going to happen the way you have all dreamed of.

Your best course of action is to accept that and take advantage of the uncertainty out there right now. Make some low ball offers, you never know what will happen.

Wait until 9 or so months from now and I guarantee you the horse will have bolted (again).