Friday, September 4, 2009
Market Wrap August!
Well, another turbulent month has past with not much happening in my real estate circle, but apparently quite a lot is happening around Australia, especially West Sydney and Melbourne, two places which have figured quite prominently in the national media. We all know Sydney has had a bit of a slump of recent years, and Melbourne, especially around the CBD, has been quite stagnant. The rest of Australia seems to have been forgotten, in terms of media coverage anyway.
We are continually being reminded of the looming interest rate rises. There has been all sorts of outlandish claims, such as a recent one that claims we need a 2% adjustment within the next 18 months. I for one think this is just crap media hype. I mean seriously, the indicators are not looking too good for interest rate hikes. Yes, Mr Swan was creaming at the 0.6% growth of our economy, but seriously, unemployment rates are still on the up, the world economy is staying relatively stable (slowly coming out of it's slump) and inflation is rather low from what I hear. These factors ad up to the reserve bank rate being kept low, but sooner or later, the recovery will be lead by IR increases by the banks.
Now, this is going to hurt a lot of people, let's not kid ourselves about that, and I may even be one of them! But surely, we all have contingency plans in place, investors are looking for avenues for survival and we will march on, albeit in a drunken knock-to-the-head state.
I for one am getting prepared, at least mentally, to the interest rate rises eating into my disposable income and me having to live on rice and tea. Not yet, but soon my friends, soon this WILL happen. I've been there before....it's not pretty. For now, I shall enjoy my caviar...