What Is Your Prediction for Property Prices in 2021?

I am finding it hard to decide if it is wise to buy a property in the current FOMO fueled market or if its better to wait for things to settle down a bit. Its hard to tell if we are in a short term peak or the start of the next leg up.

It might be interesting to do a poll and look back on it at the end of this year to see if OzBargainers got it right.

Poll Options expired

  • 341
    Prices will go up by a lot (15%+)
  • 109
    Prices will go up by a little or remain steady
  • 59
    Prices will go down

Comments

  • +8 votes

    Buy now or pay more later.

  • +20 votes

    I reckon at the end of the year there will be people bag holding Bitcoin blaming everyone but themselves that they've lost half their money.

    FOMO driving speculation will cause property prices to rise follow by drop when people realise the value of the property hasn't increased that much.

    • +6 votes

      FOMO driving speculation

      FOMO is driving speculation in all markets, from property to shares to bitcoin etc.

      Once people wake up, like what has happened in the stock market, you'll see a sudden drop in prices

      • +8 votes

        Agreed. Interest rates are so low nobody is bothering to save. You make more money literally gambling on just about anything (shares, crypto, property) because it is all going up right now.

        But when interest rises those maximally leveraged home loans are going to really hurt people. Money will start leaving stocks and move towards savings accounts.

        And is interest rising already? Recent activity in the Australian markets as well as US give a strong indication in the affirmative.

        So to answer the question about property.. up or down? Up, up in the short term thanks to the media's mad pumping. But when it falls it will fall hard.

        • +1 vote

          because it is all going up right now

          Unless its USA tech stocks…. They are going down! Lost most of the gains in 2021 already!

          •  

            @JimmyF: If you think about Apple which has $100bn+ in cash.

            If interest rates go up if people buying less iPhones or how is it hurting Apple?

            Any one of the FAANGs which makes up 25% of the S&P500 are literally awash with cash.

            Interest rates are an excuse for Wall St to slaughter Main St.

            • +2 votes

              @netjock:

              If you think about

              And that is the problem. At the moment, these companies performance seem to have little to do with the share price! Its basically come down to gambling, as we have seen with GameStop recently.

              Afterpay, GME, Tesla, Apple, Amazon the list can do on.

              Many of these stocks doubled or tripled or more in the last 12-18 months for no real change in the business model. Infact some models would be impacted more so than normal.

              Apple
              52-wk high 145.09
              52-wk low 53.15

              What have they really done in the last 12 months to triple the value of the company? Nothing

              Afterpay
              52-wk high 160.05
              52-wk low 8.01

              Oh my…… Yes well….

              GameStop

              52-wk high 483.00
              52-wk low 2.57

              If only I had a time machine!

              •  

                @JimmyF: Apple, Afterpay and GameStop. They aren't in the same league.

                •  

                  @netjock:

                  Apple, Afterpay and GameStop. They aren't in the same league.

                  They are all disconnected from the 'true' company value. Not one of them has done a single thing to double (or more) their value in the last 12 months at all, but yet here we are.

                  •  

                    @JimmyF: Apple makes a lot of cash and that cash of deployed at same RoI would be huge. Only 3x

                    Afterpay at 20x or GameStop ($4 and now $190) these are just ridiculous.

                    Different leagues of disconnect is what I am trying to say.

                    •  

                      @netjock:

                      Apple makes a lot of cash and that cash of deployed at same RoI would be huge. Only 3x

                      Apple also made a lot of cash 12-18 months ago. But it hasn't double or triple its income as reflected in the share price change over this time, not did it double or triple its profit either.

                      https://www.statista.com/statistics/263427/apples-net-income...

                      Different leagues of disconnect is what I am trying to say.

                      Agreed.

            •  

              @netjock: Cash reserves say something about past earnings, but not much about future earnings. Share prices are based on predictions of future earnings.

              Having a cash reserve can be enable a market leading company to respond to strategic threats. Being awash with cash can be a sign that a company's management is uncertain about the best to invest it to grow the company.

              •  

                @trongy:

                Cash reserves say something about past earnings, but not much about future earnings. Share prices are based on predictions of future earnings.

                Oh here come a genius. Having cash reserves is provided you haven't paid it out in dividends. As a new shareholder you want to know what assets you are buying to generate those profits which some is retained as part of cash reserves. But then you must be the new generation which don't care about book value or what underlying you are buying. Predictions of future earnings is why Tesla has a pie in the sky valuation given they are predicted to take over the world when they are hardly profitable. Just a bit like the dot com boom. I'm an indirect shareholder through funds.

                Having a cash reserve can be enable a market leading company to respond to strategic threats

                You mean like Uber (ploughs billions into self driving cars to try to remove the driver and having to sell up and turns out the only profitable part of Uber is food delivery which is bicyles, maybe they should have gone into automated bicycle business) and General Motors (pre bankruptcy) having cash might just mean it takes longer to go bankrupt and into administration. History is littered with company awash in cash but manage to lose it all. Let's go with General Electric, Kodak, Xerox just to name a few.

                Being awash with cash can be a sign that a company's management is uncertain about the best to invest it to grow the company.

                Return it to the shareholders please. Tesla has a lot of cash raised. Elon instead of putting US$1.5bn into Bitcoin could have just paid a dividend to shareholders and if they wanted to put it into bitcoin they can do it privately.

        •  

          RBA doesn't expect to raise interest rates until 2024. https://www.afr.com/policy/economy/rba-expands-qe-by-100bn-u...

          • +8 votes

            @innov: The devil is in the detail, they don't 'expect' to raise interest rates.
            Unfortunately the RBA doesn't control international markets, and Australian bond rates are already on their way up, in a big way. So either the RBA is trying to pull the wool over our eyes or the bond buyers (banks, super funds) think that inflation is going to kick in. Either way rising interest rates will bring everyone down to earth when they start paying 10's of thousands more than they signed themselves up for.

            Shackling yourself to a million dollar mortgage for a 2 bedroom unit in Sydney due to FOMO is not something i'd like to be left with if i had 2 kids and wanted to upsize only for my house to be worth $500k less and i had to pay it off until i was 60.

            • +3 votes

              @Drakesy: RBA can create money and knock the market into step. The low fixed rates is RBA money lent directly to banks at 0.1%

              You are right about bonds but that impacts variable rates.

              You are also right that signing for $1m mortgage for 30 years expecting rates to remain the same is not a great plan. But there is enough people who can't see past how to live on the next pay check to sign up to be 30 years a slave.

        • +1 vote

          I loved it when the property market crashed last time interest rates went up. Oh wait…

          •  

            @redfox1200: That's because the RBA were always able to reduce interest rates in the past.
            This is a different kettle of fish which will require a different approach. They've run out of ammunition and printing money to release as bonds or QE as it's otherwise known can have the effect of driving up inflation as there's more money floating around the system.

            With inflation comes increased interest rates to bring it in line (admittedly inflation would have to get quite high for this to happen, but its a possibility.)

            •  

              @Drakesy: and when inflation comes, the best place to be is in assets…. like realestate and commodities

              •  

                @redfox1200: Correct, as long as you own it and aren't paying unreasonable amounts of interest on it.

              •  

                @redfox1200:

                when inflation comes, the best place to be is in assets…. like realestate and commodities

                No. Not real estate.

                If you are renting out your $500k house for $300pw and interest rates go from 2% to 4% it effectively increases your repayments decreases your profits therefore price of your house should come down. Unless you increase your rent. Unfortunately rent increases are a lag rather than pre-emptive therefore you are more likely to be caught in a cash squeeze (higher repayments) before rents go up to keep pace.

                Commodities? Which ones?

                Which ones? Ones that pay no dividends like gold / silver / bitcoin (if you call it that) means cost to hold goes up (because some people buy on margin) therefore either value decreases (margin people sell out) or capital appreciate has to accelerate. Given increase rates drain cash (say you an IP investor also investing in gold) then less money go into commodities.

                Base commodities such as iron ore might go up because there is great consumption demand but I'd think we're pretty much at peak consumption. I can't see increase interest rates means we buy more cars (requiring more base metals).

                The problem with inflation right now is everyone is talking about it and wanting to get it up to 2%. Bank of England was doing forward guidance in 2014 / 2015 of how inflation will overshoot their 2% boundary causing rates to go up in 2016 etc but never happened. BoE was only able to go from 0.25% to 0.75%.

                Problem I see is everyone is basically tapped out on debt. There is mortgage, IP loan, car loan (or lease), Afterpay etc etc. Not many people having savings to empty out to spend causing inflation. If you sell your property and spend it then you're going to be cursing yourself being miserable on some tropical beach because you could have made an extra $50k every year not selling out. Or you could be cursing yourself at home sitting at the dining table because you can't cash out because you can't get back in.

        • +2 votes

          But when it falls it will fall hard.

          People have been saying this since 2008.

          •  

            @Charmoffensive: Market has the ability to stay irrational for longer than you can be solvent.

        • +1 vote

          Long series of rate rises before people leave stocks. Most savings accounts without bonuses are paying 0.25%. index is pay 2.8% dividends.

          •  

            @netjock: Sadly this is true. FMG now have 11% divvy 100% franking credit. If i do not have homeloan, it's better just to put all there. Not without risk tho.

            •  

              @Bargain-er: FMG share price should adjust up. Reason why is nobody believes iron ore (commodities) prices are sustainable.

              If inflation increases commodity prices then share price of FMG, RIO and BHP should go up but it isn't. I think it is just another Wall St faking it to make central banks act. Low interest rates is good for Wall St because they need to suck more money in to make bigger management fees.

      • +3 votes

        Isn't the problem also caused by the fact people have money and they don't have a place to put them?

    • +2 votes

      Look how 'right' this guy was 2 weeks ago about bitcoin lol! All he does is post about how bad bitcoin is. I guess even a broken clock is right twice a day, but until then it's just spamming the wrong time over and over and it's not good for anyone.

      https://www.ozbargain.com.au/node/606634

      • -2 votes

        Bitcoin still hasn't even recovered from that.

        Got anything to contribute to this thread or just stalking my posts because you are salty?

        • +4 votes

          Are you serious? It hasn't recovered? Do you apply that principal to share prices such as Tesla, saying that Tesla share price has crashed and hasn't recovered yet in reality it's up significantly on the price it was a few months ago?

          In fact Tesla and many other blue chip shares have gone down significantly more than BTC yet haven't 'recovered' anywhere near as close as BTC has over the last month - yet you won't make any comments about the speculation pumped into every single liquid asset at the moment?

          Your posts against BTC are not grounded in reality, they are just grifting against BTC with a broken crystal ball as your previous posts proselyting against BTC for a long time are evidence of.

          You call me salty, but your entire post history is a salt mine for BTC. I don't have a problem with people making posts against BTC, I have a problem with your posts specifically being grifting by definition. It's practically the only thing you talk about on this forum. I go into topics about house prices and you're making grifting posts about BTC. I don't like people grifting the OZB community. It's not constructive, it's potentially harmful (stop giving broken financial advice) and it's bordering on irresponsible.

          • +1 vote

            @studentl0an: no you are clearly right, everyone will be using BTC currency any day now.

            I mean all of us will be using smart contracts, and storing everything on the ledger. It'll have widespread adoption next week, or the week after, oh sorry I meant next month, or next year.

            I think any one predicting the exact end of the bitcoin bubble is almost certainly mistaken. That doesnt mean its not a bubble.

            •  

              @modiika: I never said any of that.

              I never said it wasn't a bubble either, everything liquid is in a bubble too which makes it - not actually in a bubble as money printing is pushing up the price of everything. The market has changed, we are seeing meme stocks become stores of value rather than saving cash. People don't have confidence in the system, money printing is at an all time high and that spells bubbles everywhere.

              The problem is when people like Deme make grifting posts and topics proselyting the end of BTC, while the value is actually increasing. That to the average person on OZB is as bad as people telling them to put savings into asset bubbles.

              How about putting everything into perspective and not looking BTC as this single liquidity bubble (while every asset is in a bubble), while incorrectly calling out crashes?

              •  

                @studentl0an: You seem more moderate in this reply. But you really come off as a BTC advocate in the response I was replying to.

                I think Bitcoin is a different sort of bubbles to the others. So i think its right to call it out.

          •  

            @studentl0an: Tesla definitely is a bubble. A slowly deflating bubble hurting a lot of investors who thought it was too big to fail.

          • -1 vote

            @studentl0an: You think Tesla isn't over valued?

            Bitcoin is crap, I'm not saying cryptocurrency is crap just the implementation that is Bitcoin sucks.

            It's value is negligible and its price is only due to people that are rich people pumping (Elon) and bag holders trying to get out.

            So I ask you three questions:

            1. How much do you think the value of bitcoin is?

            2. Is your goal to profit off the speculation of Bitcoin?

            3. In case you are "in it for the tech".

            Prove it.

            Write an algorithm that finds a n-bit partial preimage of H(seed+i)

            Where:
            H is SHA256
            i is a monotonic counter
            + is integer addition operator
            seed is the given seed value to start with.
            n is the number of zero bits at the start of the output of H

            Then I'll believe you actually understand how Bitcoin works.

            This should take less than 60 seconds to do you can use any language you like including pseudocode.

            You can replace i with a PRF if you want.

            If you truely thought Bitcoin was useful then you wouldn't care what I thought about the price.

            I suggest if you genuinely believe Bitcoin has utility to educate those on it so they can too do as you do. But I believe you just want people to "buy Bitcoin it can only go up" so you can profit off their eventual misfortune. studentl0an is the grifter…

            • +1 vote

              @deme: Not sure what you are on about and you don't make much sense, to be honest.

              Bitcoin, crap or not, is very old technology. In fact, the whole blockchain apart from emerging ones are pretty old. But, just like any tangible thing or not, it's worth what you are willing to pay for it. I do think BTC will be $1m in 10 or 15 years. If it has no value for you, just move on, just like anything in life.

              As for the 2nd point, everyone is in for the speculation of Bitcoin, just like gold.

              3 - Just nonsense. By your logic, if I like a car, I should know how to build or program one?

              I'm in for the tech and highly believe that crypto has a good chance to replace many of the shortcomings of the current financial system which I dislike.
              I do hold ~40 cryptos. I do believe in some of them, others simply because they were there and I want to profit on them.

              • +3 votes

                @BrokenTissue: Value is not price.

                If you are in Bitcoin for speculation then you don't believe the price matches the value.

                What is wrote in 3 underpins the proof of work function of Bitcoin. The fact you didn't see this shows you know little about how Bitcoin works. It's literally what keeps Bitcoin secure and what miners do.

                Let's try something a few years ago a mining pool for over 51% of the hash rate of Bitcoin and 51% attacks have been carried out of other cryptocurrencies already.

                Imagine a global financial system gaining 51% of computer power gave you the ability to double spend

                Just remember in the gold rush it was speculators that bought gold and the wise folk that sold shovels. Some speculators won, some lost.

                Speculation is a zero sum game, value is not.

                You like the idea of cryptocurrency not the tech
                You haven't even read the Bitcoin paper because if you had you'd recognise what I wrote in 3.

                My point is I'm backing up my claim Bitcoin is shit by saying at least I understand the tech.

                No supporter of Bitcoin here has been able to show they understand the tech.

                To be clear I'm pro- cryptocurrency I think the idea is bloody awesome, but I'm yet to find an implementation that has value.

                Investing based on speculation is dangerous as long term the price will revert to the value.

  • +3 votes

    If economies begin to recover as Covid vaccines become more wide spread, there may be an increased demand for capital. If there is, interest rates will respond. Increasing interest rates tend to moderate housing prices as lending institutions have to consider future money market changes and the borrower's ability to repay.

  • +1 vote

    Spoke to my finance broker last week, and his business has doubled over the last 6 months with loan applications. Though quite a bit harder (more paperwork and scrutiny of business operations, BAS returns, turnover figures etc) for business owners and other people who aren't employees looking for investment loans. Think I'll return to share market investing for the time being - while interest rates are low, returns (if looking from an investment perspective) aren't particuarly great. And yes, of course there's (possible?) future capital gains to offset low rental returns

  • +1 vote

    People will still be buying and selling.

    They will also post in OzB forums.

  •  

    These damn low interest rates!

    • -1 vote

      the kids don't know. back in my day interest rates were 17%. and not to borrow. to invest.

      i saved a grand from my first summer job, earning something like $2.65 an hour, and put it in the bank / building society and a year later i had $1170. if only i didn't blow it all on hookers and blow i'd own a house. (well would you believe nintendo and surfboard)

      • +11 votes

        The old 17% interest line…it was only 17% for 9 months.

        Also, which would you prefer? 17% on $100k or 3% on $1m? Give me the 17%.

        https://www.smh.com.au/money/borrowing/todays-housing-crisis...

        •  

          Also, not mentioned was that the inflation rate was around 7.5% at the time so the increase in buying power of that money was not 17%, only about 9%

      • +4 votes

        Ok boomer

  •  

    Of course go up… When property prices are going down? It will be down when we can create empty land space in the middle of the air….

    •  

      Property: disagree, not sure if you are being sarcastic but you just described apartments.

      Land: I agree with you as a market obviously there is some land that will be underwater in 50 years.

  • +23 votes

    If you're going to live in it. No point trying to time the market. Just work out what you can comfortably afford, buy and enjoy.

    • +8 votes

      The problem with that is that I can't even afford a dunny in Minto.

      •  

        Sounds like it was fine "back in the day" even with record high interest rates. Now, it's just a shitty situation

  • +3 votes

    If rates go up then there will be a bloodbath, if rates remain steady then there will be a little to moderate increase, if interest rates go lower then inflation may hit harder and prices may skyrocket 10-15%.

    • +1 vote

      Price sky rocket then that inflation feeds through to higher prices (house prices can't go up without further cash flow) and interest rates go up and it is a blood bath.

  •  

    Real estate is in a 25 year uptrend. It would take Godzilla, King Kong and Clarke to bend it.

    https://www.aussie.com.au/content/dam/aussie/images/general/...

    Don't hold your breath if you're waiting for a discount.

    • +2 votes

      🤦‍♀️ the "past performance is not an indicator of future results" is not compliance jargon. It's been studied for decades.

      Past performance has no bearing on future results

      • +4 votes

        Potential investors have been saying that while they've been waiting and waiting and waiting for a crash.

        Their neighbours on the other hand got in the game 25 years ago. They then bought another one 15 years ago and another one 5 years ago. They now own three assets while the potential investors are still waiting.

        They'll keep waiting for a crash while the price keep going higher and higher.

        "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves." P.L

        "I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it." P.L

        • +2 votes

          A few, like Soros did it.

          • -2 votes

            @hueylewis: The list that he is on is very short.

          •  

            @hueylewis: He did do it or get lucky?

            • +1 vote

              @deme: He shorted the british pound and made a billion in one day. He knew exactly what he was doing, it was not luck. He saw the circumstances leading up to the crises and made a rational decision to act.

              Forbes:-
              Soros played a complex game. Here's how it went. Soros expected the following: the breakdown of the ERM and a substantial realignment of European currencies; a dramatic drop in European interest rates; a decline for European stock markets.

              So, rather than simply shorting the weak currencies, he also placed simultaneous bets on interest rates and securities markets that would be affected by the currency realignments.

              In carrying out this operation, Soros and his aides sold short sterling to the tune of about $ 7 billion, bought the mark to the tune of $ 6 billion and, to a lesser extent, bought the French franc. As a parallel play they bought as much as $ 500 million worth of British stocks even while they were shorting sterling, figuring that equities often rise after a currency devalues. Soros also went long German and French bonds, while shorting those countries' equities. Soros' reasoning on the French and German markets was that upward valuation was bad for equities but was good for bonds because it would lead to lower interest rates.

              "When the Italians finally devalued the lira and the Germans lowered rates slightly," says the Soros spokesman, "it was almost like we'd been preparing for an exam for six months and now were finally taking our test."

              After the lira was battered, Soros read that Helmut Schlesinger, president of the Bundesbank, had openly stated that Germany's central bank would not go to the wall for the pound. Soros has said that he saw this as a "clarion call for everyone to get out of sterling."

              There were plenty of players beside George Soros betting against the central banks and the ERM. Foreign exchange traders at money center banks and investment banks like Goldman, Sachs are constantly aware of what is happening in the international money markets. When large institutions, mutual funds and multinational corporations that do massive currency hedging to protect their profits started selling the weaker European currencies in September, the traders immediately picked up on the jump in volume they were handling for their customers. They could easily estimate just how great the selling pressure was and how much the central banks would have to spend to prop up those currencies. Then, the banks and investment houses got into the game for their own accounts.

        • +3 votes

          waiting and waiting and waiting for a crash.

          the fact that they are able to have the cash, and wait for a "crash" means that the crash won't come - people would be buying up as soon as the prices drop a tiny bit.

          A crash comes when nobody wants to buy anymore (or could afford to buy). It means that those who were waiting suddenly weren't able to pounce. It means a shock that causes those with capital to withdraw.

    •  

      Might want to look at Perth M8.

    • +1 vote

      Chart from Aussie Home Loans. You might as well put up a chart from Crown Casino saying money laundering in gambling industry is not a thing.

  •  

    Depends on what suburb you live in as to how much prices will go up love how the media say house prices are skyrocketing yes they are in certain suburbs.

  • +2 votes

    … look back on it at the end of this year to see if OzBargainers got it right.

    Property will still cost money….

    (I have this great feeling that I'm going to be right! lol)

    •  

      OPP. I can explain it.

  • +16 votes

    Good luck finding someone to rent at a reasonable price.

    I've got a few empty properties at the moment, reduced rent by 30-40%. lol. These aren't in super expensive suburbs either, down from $380 to $250 a week and nothing is grabbing.

    It's only good if you want to live in it.

    • +4 votes

      Really depends where you live. In my state it's the opposite and there aren't enough houses to go around. Many are increasing their rent tenfold and people are biting.

      I'm a nice landlord and did a ~4.5% increase.

      •  

        What state are you in? I assume you mean 10% rent increase, not tenfold.

        • -6 votes

          TAS. Tenfold as in significant.

          • +2 votes

            @Clear: tenfold, like decimate, has a very precise meaning.

            • -2 votes

              @Antikythera: Tenfold as in significant.

              • +1 vote

                @Clear: Tenfold as insignificant?

              • +1 vote

                @Clear: but how many times did you fold it?

                •  

                  @modiika: Like toilet paper. A significant amount of times. Single ply is cheap.

                  •  

                    @Clear: i dont care how often you fold single ply, its still always too rough.

            • +1 vote

              @Antikythera: The rent is literally a billion dollars per picosecond

          •  

            @Clear: Have to assume either mathematics or english work quite differently on the Apple Aisle..

            • -1 vote

              @goingDHfast: Yeah we're a different breed. Like indicating to leave a roundabout.

      •  

        Same here in ACT

  •  

    Depends where you are talking in the country and if you are buying to live in or for investment purposes. The rent rates seem to have went down quite a bit from what ive seen so you would have to factor this in if its for investments. If you are buying for PPOR then i would just go ahead and do it when you are ready.

  • +2 votes

    Prices will go down drastically. Right now the interest are low so people are tempt to borrow more but by the end of this year, interests will raise and a lot of people will find themselves bracing to repay the mortgages which will end up with more houses back on the market. Especially, in sydney.

    • -1 vote

      Interest lates are going to stay low for a while not end of this year.

      • +4 votes

        Even if the RBA holds rates for the next 2 years, how can you be certain that banks won't raise rates? A: You can't, banks do whatever they want.

        • +1 vote

          Exactly. Name me a single Australian bank with a tracker mortgage tied to (moves with changes in) the RBA base rate. None.

        • +1 vote

          you fix your rate, you can fix 3 years for close to 2%

      •  

        Have you ever have a mortgage? There s at least 2 options :

        1. A fixed rates for at least 2- 3 years based on the bank willing and usually a bit more than the actual rate

        2. A variable rate that is based on the fluctuation of the market ( like right now , people who choose that before hand are winner)

          What i can see right now is low rate to borrow so people wants to buy . Price are increasing exponentially as seller see that as an opportunity. Let s say the neighbours see the run down house is selling for 1 millions, they will want the same. So the same street who had only 1 house on the market will end up with at least 5 house all on the million mark. First buyer wants a house so each house will be buy by someone. In a couple of month , because the economy is back , that variable rate that was so low will be at the highest and every single person who didn t expect that will end up losing everything! This is how economy is working. Fluctuation on the market is not predictable . It can crash one day and go back up the next day! It s all about investing carefully .

    • +1 vote

      You can fix at 1.99% for 4 years.

      Never bet against the bank. The house always wins

      • +1 vote

        Not entirely true. I don't have the statistics handy but I think the bank wins approximately 80% of the time on fixed rates. 20% of the time the consumer wins. Odds are not in the consumers favour.

    • -4 votes

      Lol you’re dreaming mate, the RBA has said rates won’t rise until 2024.

      • +7 votes

        The RBA is official rate. Many expect banks to put up rates this year if housing prices continue this way. Banks will do it regardless of what RBA does

        • +1 vote

          Banks don’t make rate decisions based on what house prices are doing. APRA will likely intervene later this year which will limit the flow of lending to higher risk borrowers, with the objective of slowing house price growth. This APRA intervention could force banks to raise rates for some higher risk new loans

          •  

            @El-Rhi: Banks make decisions based on risk, lending conditions and costs and of course their profit margin. They all took big hits to profit margin in the last year and the rising house prices are an indicator that the market is ready for them to take some of that back on the variable interest rates. If current conditions persist I would expect a variable rate rise in the next 3-6 months.

            • +1 vote

              @gromit: Could be possible. Do you think variable rates would go up without an increase to funding costs? That’s the only way I see rates going up.

              • +1 vote

                @El-Rhi: yes rates will go up regardless of costs (but costs are rising for them), Banks will be looking to recoup what they lost last year and a rising property market tells them there is money on the table for them.

      • +2 votes

        Fix won't change, variable will.