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  1. #971
    Guru Crypto Crude's Avatar
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    brut-SC, I actually wonder how many properties Macdunk has brought or sold over the last 10 years? I doubt that many... I actually think he has just read alot of Investment books???
    brut,
    Im not about to start speculating on how many houses mackdunk has or does not have...
    Mackdunk is a living legend, and I pretty much caught him out on a rare mistake (which was admitedly a major mistake on his behalf)...
    This mistake is so large that it outweighs him beating me in our two stock share picking competition... for real...
    He was selling his houses when he was telling us 'it is never a better time to buy'...
    At least Joe told us he had already sold his houses when he was saying
    "Mackdunk is absolutely right, it is never a better time to buy than right now"...hahaha... ... true story...all on this thread, pages back...

    all im prepared to say is,
    mackdunk would not buy me a beer at the auckland meeting so perhaps he is abit of a squirrel... haha...
    No comment on how many playboy mansions he has.........

    .^sc
    Last edited by Crypto Crude; 27-07-2008 at 02:47 PM.
    Nakamoto means of Central origin ...

  2. #972
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    SHREWDY, You know only to well that i sold a lifestyle property, and bought a new house this year. I sold the life style well above valuation, and bought the new house well below valuation. To say i only say this or that after the event is untrue in property as it is in the sharemarket. I only ever sell at my price, and only ever buy at my price regardless of what stage the property cycle is in. I buy and sell at any stage in the cycle. The novice property investor who prattles on about not locking in loans has a lot to learn, thats if they ever have enough guts to actually do it some time. Right now is a very dangerous time not to lock a loan in with inflation ready to take off with the price of oil about to go sky high after the olympics. Its only a numbers game, get the numbers right, and sit back watching the smart greedy people doing nothing. Its a risky game trying to time it or risking numbers that might pop out the hat in tomorrows mareket. Macdunk

  3. #973
    Guru Crypto Crude's Avatar
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    Mack dadunk...
    heres the RBNZ OCR statement...

    date 24 July 2008

    The Reserve Bank today reduced the Official Cash Rate (OCR) from 8.25 percent to 8.0 percent.

    Reserve Bank Governor Alan Bollard commented that “more unpleasant international news has emerged since the June Monetary Policy Statement, and there is a risk that the domestic economy will slow further. Moreover, the cost of funds raised abroad by banks has been rising in recent months as the international financial situation has deteriorated. Today’s cut will help to mitigate the effect of these increases on the actual borrowing costs paid by firms and households.

    “Recent oil and food price increases mean that annual CPI inflation should peak around 5 percent in the September quarter of this year
    . However, we expect that inflation will return inside the target band in the medium term. The weaker economy is expected to reduce pressure on resources, making it more difficult for firms to pass on costs and for higher wage claims to be agreed.

    “Economic activity is likely to remain weak over the remainder of 2008. The ongoing correction in the housing market, together with the very high oil prices, will limit household spending and constrain the extent of recovery. However, high export prices and an expansionary fiscal policy are expected to contribute to a gradual pickup in activity through 2009.

    “Consistent with the Policy Targets Agreement, the Bank’s focus will remain on medium-term inflation. In this regard, it is important to note that monetary policy has been reasonably tight for some time, and is now restraining activity and medium-term inflation pressures. Provided that the outlook for inflation continues to improve and there is no excessive exchange rate depreciation, we would expect to lower the OCR further.”


    "The novice property investor who prattles on about not locking in loans has a lot to learn"

    mackdunk, Id like to make a bet with you... but you never take my bets on...
    Aggregate demand is falling and therefore inflation is going to fall after its peak in a few months...its a fact... its a cycles game... Interest rates have stayed the same or risen every time over the last 5 years, and now a new cycle has started... We are on a new Interest rate cycle where OCR will be percents lower in 5 years as to where it is now!
    8% now... in 5 years the OCR will be 6% or less...Probably much closer to 4.5%....
    do you want to bet on it...?
    I agree, "get the numbers right"... getting the numbers right means your loan should be floating...
    Its a risky game trying to time it or risking numbers that might pop out the hat in tomorrows mareket. Macdunk-
    Being a future homebuyer (minimoke, im not all talk, a doer here)... I have to take on these sorts of risks ie waiting for the market to bleed dry, get floating interest rate.. I have to take all the 'givens' that I can... Property prices are so expensive for us future first time homebuyers, that we can not take things for granted like you buffs do... I can not blatently pay more in interest payments just so I can have a set interest payments figure.....Man, you just brush that dirt off yah shoulder as if it were crumbs...

    .^sc
    Nakamoto means of Central origin ...

  4. #974
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    SHREWDY, When you play numbers you play with numbers that are fixed for the medium term, in order to avoid nasty shocks. Missing out on a few quid here or there because the numbers trend in your favour, is nothing compared to getting hit with a sudden leap in interest rates. When you get interest rates that we had in the past of 18%, along with a collapsed share market such as 1987, you might learn to be cautious. The share market is crashing, the economy is in trouble, The property cycle has dropped, yet you are smart enought to pick the inflation rate in tomorrows market.
    The share market has dropped 30% this year, and will crash. The finance companies are dropping like flies, its the banks turn to get hit next. The one thing left is property, which when its all over is worth every cent you paid for it. Set it up in a cautious conservative way that you can afford, dont be a smart ass and try to beat the system. Macdunk

  5. #975
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    But who will be able to buy property Duncan if all that gloom transpires?

  6. #976
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    Duncan, many things have changed since the 1980's...to see 20 odd% inflation again would be very suprising. Unlike the 80's, we now have a floating exchange rate, and inflation targeting regime...property is only a partial inflation hedge, the best thing would be to go to the underlying inflation cause if you want to be fully protected.
    By the way - it's upside_down, not upside_umop

  7. #977
    Senior Member upside_umop's Avatar
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    Also, about the 3 year fixed etc, banks usually use a forward curve to predict rates and therefore trying to beat the market doesnt always work. 3 years ago, commentators were saying 'take out a 1 year fixed rate...' that wasnt wise advice.

    a 3 year would have been marginally better, but you would still have been entering today at a high rate.

    I guess it comes down to individual circumstances. 3 years definately does give certainty..but im with shrewd. I reckon a 2 year would be more beneficial at the moment. Then again, I've never been in the property market..!
    By the way - it's upside_down, not upside_umop

  8. #978
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    Hiawatha- I cant answer your question without research... Hopefully someone can help...
    I agree with Upside down apart from no locked Fixed interest rate would be more beneficial....
    mackdunk-
    1....SHREWDY, When you play numbers you play with numbers that are fixed for the medium term, in order to avoid nasty shocks.
    2....Missing out on a few quid here or there because the numbers trend in your favour, is nothing compared to getting hit with a sudden leap in interest rates.
    3.... When you get interest rates that we had in the past of 18%, along with a collapsed share market such as 1987, you might learn to be cautious.
    4....The share market is crashing, the economy is in trouble,
    5....The property cycle has dropped, yet you are smart enought to pick the inflation rate in tomorrows market.
    6....The share market has dropped 30% this year, and will crash. The finance companies are dropping like flies, its the banks turn to get hit next. The one thing left is property, which when its all over is worth every cent you paid for it. Set it up in a cautious conservative way that you can afford,
    7....dont be a smart ass and try to beat the system.
    8....Macdunk
    Give mack 'some slack' a dunk...
    Never.......
    1....I disagree....The reserve bank meets ever six weeks, if there was some 'nasty shock', then I would have abit of time to act before the next meeting...
    Only those that are locked in for the medium term are worse off.... Its like going flatting and getting locked into a one year term....some flats ask you to sign an agreement, others dont....
    what would you want?....

    2.... A few quid.... ----> .25% on a 300k house is $750 per year... half a percent for a few years is serious dosh mate (if you are locked in)...If you are locked in for 3 years and there are multiple cuts then watch out... If you hold multiple mansions then best you get yourself a young gun in the know...

    3.... the OCR was implemented in 1999 and we will never again have to suffer what your generation had to back 300 million years ago.... I mean 25 years ago...
    Yes we need to be cautious at the moment, Im hoping for a market crash even though I hold shares... I will be back just like you to swoop, and I am looking to exit at some stage... I have time to run, Ive done it before and I will do it again (fact)... I hope to see the markets continuing to fall so it reduces my risk....

    4....... look mackdunk, I dont want to hear it on the property section thread.....how about You give me a hard time on the sharemarket when my portfolio is down in negative territory, until then let me rest in peace... If you really want to know all my stock positions are up apart from CTP and CTPOA... ive got more than half my portfolio on CUE and LMP now... and the only other position I lost money on this year was FAR about $500...that postition was first time ever id locked in a short stop, thanks for that one.. I learnt that from you.....
    ... im bit mad about WHN though, which ran 50% and came all the way back down to breakeven... oh well....

    5....Mackdunk, I dont need to be that smart, the RBNZ has said it all and they are impartial and the most open central bank in the world ( I even posted their statement on the thread)....... the most open Central Bank in the World... Period....

    6....blah blah blah.... Im a fly swatter...(one of those magnetic ones), I gobble up flies for breakfast... banks smanks... Ive mentioned banks before... If you remember MD I got booed off the thread...they said I was paranoid etc, ...Houses will be worth every cent you paid for it, Yes.... at the bottom of the market...

    7.... You of all persons know that systems are put in place to be broken....

    8..... Shrewdie....


    .^sc
    Nakamoto means of Central origin ...

  9. #979
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    I'm not a first home buyer but feel like one, have never been so interested in property matters as now, never knew what property was worth till it sold and never cared.
    After one year in our new house we have no regrets but I was so aware of the 'toppiness' of the market (May-June 07) that we locked in the 8.3% for 5 years, not because it will be necessarily cheaper over that time but because it gave us certainty that we could budget around.
    We also paid off 5% of loan principal at no charge which I don't think one could do 10 yrs ago - things are more competitive now. Next year, if rates stay above 8.3 we may pay off more but if they dip below there will be a charge, but that's a risk we can live with. Also, what if rates are say, 15% in 5 yrs, I would want to have whittled that mortgage down a lot, at this rate we will only have about 120k owing. We may be done and dusted in less than 10 yrs and may have got into a second property if prices do drop.
    If we had kept renting we may have got a house cheaper now but interest rates are higher. The only thing I should have done better was negotiate a lower price - asking 325k, started at 305, buy at 312, but should have started about 285 (itemising all the things that need doing) and bought maybe for 295-300k.
    As I mentioned before on this thread the house gives us an incentive to work and save because you have to, one would need more discipline otherwise to save for a bigger deposit on an imaginary cheaper house in the future. I wonder also if there is an army of young first buyers out there just waiting to pounce as they will not want to miss out again should prices look like recovering.
    Of course our ages dictated some urgency in buying as if we waited too long the banks could have an issue giving us a big loan. And it gives us security for the future, a younger person would not have that urgency and may well do better to wait.
    Hard to know which camp is right at this point. Has the world really changed, is inflation really dead??

  10. #980
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    Quote Originally Posted by Shrewd Crude View Post
    Minimoke, thats a load of rubbish...oh well, I will accept your advice and let others to work it out for themselves...
    I still want to show the finance behind Loan Amortisation tables, so I will start a thread on that next year.....thanks...
    One of the risks to Shrewd Crudes approach is paralysis thorough analysis. That is never actually buying a first home. By the time SC has done all the analysis to time the property market right he then has to become a financial markets expert so he can time the interest rate market right. While all this is going on he isn’t enjoying the intangible benefits of being a first home owner.

    Rather than all the analysis a person might just work out if they are going to be an owner or a renter. The numbers never really stack up to own your own home from a financial perspective – you do more financially by being a renter. However you don’t get the intangible benefits of owning your own piece of land and having security in location.
    With the glut of rentals around now the question should perhaps be : Should I be a first home owner or a first home renter?

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