Will the increased interest rates force you to change your punting habits?
Not for now but will have to consider if rates and inflation continue soaring
Depends on how many IPs you managed to “snag” when the easy money was available and using whatever serviceability loophole you could find.
Nope don't have a mortgage or loans so business as usual.
Hoping interest rates keep on rising.
I have no debt and have a substantial Investment Portfolio.
Just an aside do you guys remember the 13-14% interest rates in the 80s?
I think cash rate was as high as 7 something percent then too
Boomers had many advantages during those times. Free tertiary education being one of them.
https://youtu.be/PkJlTKUaF3Q
Having said that. When they finally die, there'll be a huge wealth transfer.
Back then houses were seen as commodities as opposed to an asset. Cars sometimes cost more than the home.
If your outgoings, in terms of interest, fuel, food and so on are going up, but your income remains static, then something has to give. Usually pleasure expenditure which, unlike the electricity bill, is discretionary.
If inflation continues to rise inexorably into next year then what will likely happen is classic supply and demand. Punters will have less discretionary capacity. Less punters will lead to decreased supply - shops will close or, more likely, decrease input costs in terms of number of girls in the shops. That's generally a slow train though. In the short term it may turn into punter paradise - more girls than the market can sustain. I think the liklihood here is that the girls will supply more service to convince customers to become regulars. But it's not sustainable and over time girls will leave. They'll go home. We will all suffer from this, even cashed up punters.
If we start to see inflation slow in a determined fashion then the above outcome will likely be averted.
Inflation is no good for anyone. Strong suite of investments? Good for you, but less spend across the board decreases profit and therefore dividends and therefore stock valuations. Reduced income reduces the capacity of people to pay your property rent.
We've all been sitting in a nice, warm bath. When inflation loosens the plug, we'll all shiver a little.
When shops start to bump up prices, guys need to consider whether they should pay the higher price or look for other alternatives if they want to continue their punting.
Your all saying you don't have mortgage to pay and this and that. But increase interest rates also affect rent. Which will affect the prices of these shops rent too. Which also has a knock on effect to future punting prices aswell. With a new increased punting prices and increased everything else, ofcourse punting will be affected.
I have seen threads about an increase in $20-50 for punting in fs shops and people and complaining about that. Imagine THAT increase in massage shops.
Most people here definitely have mortgages. I have one myself. Luckily I fixed my interest for 2 years and utilised an offset to reduce overall interest paid.
Having said that, definitely feeling the increase in costs. Materials overall went up significantly. Having said that I do enjoy discretionary spending. Was checking my eating out/uber eats budget for last month and I think I spent over 3k just on eating out and uber eats. Need to cook more as I do quite enjoy cooking.
I have mortgage. But I still put aside some cash each month for discretionary spending. So far have not had to reduce that but we will see how it goes next few months
Correct. 12 months ago you almost couldn't give away residential rentals, discounts of $100/week were not uncommon. Now rental demand is growing, discounts are a thing of the past, increases have started and people are bidding for rentals again.
Commercial rents may be a different proposition, has demand for commercial property increased? I'm seeing more and more vacant properties in the suburbs, and more businesses trying to sell (some are even giving away their business as long as someone takes on the lease). Massage shops attempting that kind of increase would see a fair hit in business would be my prediction.
My ML complain about the increase in rent and mortgage. She rent and have a property. So far she haven't ask for more but I got the message she is asking for more. The shop she works still change the same.
Increasing prices is *kind of* what the RB wants, but won't say, because it leads to the result they want more quickly. Which is decreasing demand for services. We stop buying, we go for the cheaper option. Shops/girls go out of business until we reach equilibrium again; where supply equals demand. The market calms down and we all go our merry way. Takes about 2 years from go to whoa though. A slow train.