**property to remain flat for some time**, page-23

  1. 1,530 Posts.

    A) unemployment will be much higher...so less demand.
    B) the banks wont lend as much...so less demand
    C) prices will be falling...negative press= less demand
    D) everyone owns at least 1 property...who will buy yours=less demand.
    E) everyones expenses will be higher eg personal loans car loans credit card= less demand

    Honestly a 2.5% rate if true and BIS shrapnel is usually pretty good and have no vested interest will increase average repayments around 40%...I have many friends struggling to make ends meet at current interest rates and I dont have many firends who havent bought a property in the last 5 years.


    BIS Shrapnel economist says apartment market "gone"

    MELBOURNE, April 13 AAP - Investors in residential apartments
    could be forced to sell their apartments at a heavy discount as
    interest rates rose more than expected, the chief economist of
    economics researcher and forecaster BIS Shrapnel said today.
    At a property forum conducted by the Australia-Israel Chamber of
    Commerce today, Frank Gelber said he was expecting a substantial
    rise in interest rates far greater than the extra 25 basis points
    anticipated by analysts.
    "We think interest rates will go up two to two-and-a-half per
    cent before this is over," he said.
    "Remember: the market thinks there is a maximum quarter per cent
    in it now and then we don't have to raise interest rates again,
    ever - rubbish!
    "We'll see inflation, and when we do, the Reserve Bank will
    tighten monetary policy significantly, probably starting the tail
    end of this year and certainly through next year. That will
    happen."
    In this environment, Dr Gelber said he expected the residential property
    market would be "gone for about four years" as the urgency
    to buy a house disappeared.
    He said the real damage coming out of the investor sector of the
    market - inner-city apartments in Melbourne, for example - was yet
    to be seen.
    "We've still got a lot of stock coming onto the market, there's
    no demand for it, and so if you want to sell your stock you have to
    discount it heavily," he said.
    "And that damage we are yet to see. All those people that bought
    residential land or sites for building residential units, they
    won't have any cashflow for a while, so if the banks get nervous,
    they'll foreclose.
    "And we will see a lot more of that happening over the next few
    years."
    But he said the residential market would be strong coming into
    the next decade.
    AAP tsc/



    0035 GMT [Dow Jones] Australian inflationary expectations rise sharply to 4.6%
    in April from 3.8% in March, reflecting heightened concerns about rising oil
    prices; Melbourne Institute also attributes rise to tight labor market
    conditions. Data consistent with huge drop in consumer confidence since March;
    at the margin, result feeds case for a May rate hike.(JEG)
 
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