I have only agreed that int rates are coming down, not once have I referred to Keen who I think of as Chicken Little.
In response to Rezok, I think rates dropping will eventuate in some pressure being taken off the rental market.
It will take time but I think some renters will calculate that with int rates lower, it won't cost that much more to pay a mortgage rather than rent. I am hoping that enough of them go for new homes to give the building industry a bit of a lift, we need more houses.
Also with rates lower and rents CURRENTLY rising, many disgruntled share market investors will see property as a good alternative.
With two separate groups buying this will cause a rise in property prices over the next few years but when rental returns are not keeping up with the new purchase prices there will be less investors coming in. I think that plateau will take place in about 2012.
Like I have said before, I can forsee an overheating in the lead up to 2012 resulting in rising int rates. It is possible they will rise a lot and we will see the early 90's again although I don't see 20% int rates again, that was extraordinary.
Point to consider is that of the three asset classes, property, shares and cash, property is the only good looking one at the moment.
In the lead up to 2012 with int rates rising I think cash is going to look pretty good to a lot of people and that is another reason I have said I will be selling some properties in the lead up to 2012.
I hope you're paying attention Miles, in the past you have shown difficulty in grasping these things.
