real estate to hot up on stock market depressd, page-23

I remember a few home loans I settled for borrowers in West Sydney say 2-3 years ago.

At the time these guys were borrowing only 80%LVR which is fine in principle...but due to their previous blemishes were paying 8-9% interest rates with low doc/non code lenders.

Can only imagine what rate they are on now......and with their properties coming back 10-15% in some areas.....or even if they are just stagnant and not moving,they must be feeling the squeeze a little.

I think rents will go up over the next coupla years in less affluent areas.... so investors that can hold through this period will do ok.....so long as your not highly geared.


Apart from these types of loans.... marital breakups, higher rates, depressed market and loss of employment can soon tip you over.

I still think rates will start to drop by late 2009......based on the bank rate future curve predictions........but thats still 1.5 years away.....some carnage will be seen between now and then.

I expect to see at least 2 possibly 3 increases over this time.....so 9.5% or so is not out of the question.

Some people......similar to US are highly geared and will need to reduce their holdings......unfortunately some have their assets tied up like a pack of cards....and when the deck needs reshuffling the other cards come into play.

For the shrewd investor......reasonable stock will be found in some suburbs over the next 3 years.

Will be interesting to see what happends.

Adelaide is the place to be buying imo.
Still the cheapest place dollar for dollar in Australia.....and amidst a mining boom, naval contracts and a bigger influx of immigrants than previously seen all holds well for the future market.


Just my thoughts.