Uncle Glen...do you have to???

I was holding out for Glen Stevens to at least hold off for one more month before continuing to increase rates, but it seems he has finally decided enough is enough when it comes to property price rises, so he upped it. Hmmm...I wonder if he realises that raising interest rates is kind of a green light to raise rents, and, from an investors point of view, this is great. However, this does not negate the fact that rates are up and my holding costs mean even less chance for me to have KFC (which by the way, I have given up on until I drop to 80kg; 4 more to go). So, in summary, it's good and it's bad. Investors should see CG in the near future, as the economy is strong (so it seems), hence there is no need to panic. Will this rise impact on the current mini boom, especially noticeable in Melbourne at the moment, and to some degree, Sydney? Will this signal a change in sentiment, are investors going to shy away from the market? Time will tell, but for now, as we are constantly being reminded, we are still below "average rates"...

Ciao...

It's enough to make me vomit!

It's been a hectic few months for property journalists and the inevitable has once again happened. When house prices go up as they have in the last quarter, we get the typical "The Aussie Dream is Over!" and "First Home Buyers priced out of the Market!" and "Affordability Worse Then Ever!" and "I Have to Come Up With a Controversial Title!". Example here.

This sickens me to my core (unlike KFC, which now is sickening me in my stomach). As you are probably aware, Melbourne is going through the roof, house prices climbing everywhere, but most noticeable in the inner city. Yes, of course your typical buyer or investor will not touch these properties. Wealthy businessmen, overseas investors (Chinese, American and English from what I hear) and cashed up investors are snapping these up like my grandma snaps up plastic containers at Crazy Clarks. But who reads the papers??? Yep, typical blue and white collar workers, wanting to purchase their own special little piece of Austrelya (pun), perhaps first home owners. Unfortunately, people who write these stupid articles are using this segment of the population to inadvertently boost the prices and create an emotional landscape that ultimately drives people to buy as close to the MCG as they can. Hmmm....counter-productive anyone?

In many of my posts I have already discussed why first home owners need to get their feet wet in the burbs. I still can not fathom how a first home owner, perhaps earning the average wage of 60K-ish, is looking at 400k+ homes. I still can not understand why people are so against driving an extra 20 minutes, or 4 or 5 train stops further from work, but are renting. When will common sence prevail. When will youngens realise that they can still buy a house, sub 200K even, just by moving an extra 200km away. Wow, two hours of driving to see mates etc (who rent by the way), to set you up with the "Australian Dream". Plus, has anyone heard of up-sizing? It's not rocket science... beggars can't be choosers.

Topsy turvy scenario this is.