short, long, or neutral., page-60

" If interest rates increase, buying property becomes harder, what does that mean? Rental yields will have to increase."



afternoon,

I doubt it is as simple as that. Depending on how much rates increase and at what rate - business could suffer badly. If business suffers badly, they put people off. In those circumstances people would have difficulty finding re-employment.

If there are less people employed, they have less income. If they have less income they 'cannot' pay rent increases.

Rental is a huge percentage of a household income now - how could it possibly increase if people are out of work?

Have a look at Ausdrill's latest figures - I doubt many think the mining problem is overplayed ------- certainly Ausdrills shareholders didn't - as they raced for the door.

A drop of 28% in one day isn't too shabby for a fall.

If you also analyse the figures, they tell a broader story.

I would NOT underestimate the damage for WA and I certainly would NOT underestimate what might happen if things go pear shaped.

Real estate can stop like a train hitting a cliff face - and it can roll back fast also in the right (unfortunate) conditions.


have a great evening

Pinto