[PropertyInfo.010] Inflation fears back on the economic agenda

According to this article from ABC News titled "Rise in producer prices prompts inflation concerns":

"The Australian Bureau of Statistics says it is the largest quarterly increase of the producer price index in a year."

"CommSec chief equities economist Craig James says two factors drove the overall increase. 'That was higher oil prices and higher building construction costs,' he said."

"A higher Australian dollar pushed down the price of imported goods, particularly electronic equipment and tobacco products."

I don't understand, if higher Australian dollar pushed down the price of all imported stuffs, then why is the building construction cost goes higher? Is that because of increasing labout cost, or something else?

Won't be good news for any mortgage payer like use to have a higher interest rate due to inflation...

[ProperyInfo.006] Interest Rates stay on hold until after the federal election?

Remember back last week on 3/7 I reported here about an article "Home prices set to surge again?" in Sydney Morning Herald talking about "a strong economy is expected to fuel two more rises over the next 12 months".

In case you are not aware, yesterday I found another article from news.com.au on 13/7 called "Jobs fall puts rate rise on hold" which claims "latest jobs data should ensure interest rates stay on hold until after the federal election".

Economists seems to be always making conflicting statements all the time depending on what data they are looking at. But we certainly want the interest rates to stay on hold for as long as possible (or even lower!)...

[PropertyInfo.002] Home prices set to surge again?

There was an article called "Data points to housing recovery" on 8th June in www.news.com.au as I mentioned here.

Today, in Sydney Morning Herald, there's another article called "Home prices set to surge again, fuelling debt crisis" also talking about housing market recovery.

The most scary part is, it mentioned "The Reserve Bank meets in Sydney today to discuss rates. No move is expected this month, but a strong economy is expected to fuel two more rises over the next 12 months.". Oh, no, please don't increase the interest rate....

Remember back in mid 2003 the market was quite crazy. One of our neighbours who bought his house for about $500K in around 2001, put his house for auction. There were a few parties fighting over it during the auction and it was sold for $800K. Yes, he made $300K in about 2 years! If that's his primary residency, he doesn't have to pay any tax at all.

Then the market dropped a lot since then. From earlier this year, we started noticing signs of market recovery - lots of properties in our area were sold in the first few open houses (except for a few asking for 2003 prices...), and the auction clearance rate was also very high. On our street there's only about 17 houses, 5 of them were on the market and all sold very quickly in the past 12 months.

You will certainly make a good profit if you sell your property when the market is going up. But unless you got another property or start renting, if you purchase another one in roughly the same period, you might loose most/all of them in the 2nd purchase. Plus, you have to pay all charges twice...

1 Australian dollar was buying over $0.85 US dollars in last night's news. Wonder how long will this be going...