Anyway, it appears that Glen has created a situation where we are all educated about why the bloody rates actually do go up and down. (I'll give you my simple explanation) We all know inflation is a bitch, so raising rates is good to counter that, and we know that lowering rates is a great way of boosting the economy if people decide to buy TEAC and Great Wall, instead of Panasonic and Audi. The RBA have to balance this situation.
Fortunately for us, as I mentioned before, we investors win win because people know house prices go up if rates go up, and hence renters know rent goes up as rates go up....in fact, let's just say as the RBA lifts rates, everything goes up, except inflation!!! Win for everyone. Except for renters.
If rates go down, we win because our cash flow gets a reprieve and renters "think" they have won because their rent isn't raised. But we all know they're losing. Sorry, renters are taking a bit of a battering in this post.
Ciao.
No comments:
Post a Comment