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Car sales down as part of economic cooling?

johnboy 22 October 2008 27

The ABC has a piece on car sales in Canberra being down over 10% in September.

I know I’m trying to reduce my debt with troubled times ahead, how about you guys?


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peterh peterh 4:40 pm 23 Oct 08

tylersmayhem said :

What most people don’t realise is that the best way to stop the current downturn is to spend more money. By holding off on everything people are just causing the economy to get worse. You spend more money and the econoy will start to recover.

Can’t say I agree. One of the reasons the interest rates were teetering on 10% is because everyone was spending like there’s no tomorrow. High inflation = higher interest rates. Keep spending loads of cash, we will continue to drive prices up, as well as the interest rates.

Am I wrong in my thoughts?

probably not, but the first knee jerk reaction is to throw bags of money at the problem, to make it go away. Look at the US – they put together a recovery package – a hell of a lot of money, and this didn’t make the market steady. in fact, the reverse happened. people get more worried when a government says it is stepping in to shore up the market. it appears worse than it might be.

in my industry, we are seeing a massive shift in the diversification of smaller players into niche markets. they have to stay afloat. they will move away from traditional markets and rely on the services revenue that they can provide.

tylersmayhem tylersmayhem 8:52 am 23 Oct 08

What most people don’t realise is that the best way to stop the current downturn is to spend more money. By holding off on everything people are just causing the economy to get worse. You spend more money and the econoy will start to recover.

Can’t say I agree. One of the reasons the interest rates were teetering on 10% is because everyone was spending like there’s no tomorrow. High inflation = higher interest rates. Keep spending loads of cash, we will continue to drive prices up, as well as the interest rates.

Am I wrong in my thoughts?

VYBerlinaV8_the_one_they_all_copy VYBerlinaV8_the_one_they_all_copy 8:50 am 23 Oct 08

I don’t we’re likely to see property prices taking off in Canberra in the next few years, but rent is still increasing, and it’s possible to buy a property that nearly pays for itself with rent. My thought has always been to buy this type of property, put it on principal and interest loan, and let time do the work for me. This method also is also easier to replicate than the traditional negative gearing model, which hits a wall when you’ve consumed your income making up the shortfall.

At the moment there are a number of properties for sale that generate good yield (ie 5.5%+) at reasonable prices. And this return doesn’t include your future capital growth.

tylersmayhem tylersmayhem 8:49 am 23 Oct 08

And as protection in case it all goes to shit and I get laid off lol and have to fund my holidays for 18 months until it gets better.

Yes, because depressions last for 18 months…

skaboy12 skaboy12 8:29 am 23 Oct 08

What most people don’t realise is that the best way to stop the current downturn is to spend more money. By holding off on everything people are just causing the economy to get worse. You spend more money and the econoy will start to recover. The financial planners and experts have been saying this for a whle. We are contributing to our own downfall.

Growling Ferret Growling Ferret 8:18 am 23 Oct 08

Unemployment at 9 or 10% as predicted yesterday will see house prices collapse, but not necessarily that badly in Canberra unless Labour sacks 5000 or so public servants.

I think there is a still a long way to go, and house prices will drop by 25% in Western Sydney, outer Melbourne etc, but doubtful it will be that bad in Canberra. However, saying that, I have noticed that prices in my street have dropped by around 5% from the peaks of two or so years ago.

tabascoted tabascoted 5:35 am 23 Oct 08

so anyone think that house prices are coming down anytime soon? as it looks like unemployment will be at 9% by 2010^(JPMorgan Australia’s chief economist Stephen Walters)

Swaggie Swaggie 7:25 pm 22 Oct 08

I’ll be shopping for a new car in Feb (cash in hand), it should be fun if things are as bad as people are making out 🙂

Vic Bitterman Vic Bitterman 6:42 pm 22 Oct 08

Well I did my bit and bought a new one for the bride last month, not much change out of $50k, albeit on a novated salary packaged lease.

peterh peterh 5:10 pm 22 Oct 08

aussie dollar recorded at 66.62 us cents at 4.00pm today. maybe we will have a bit more to go down, yet.

peterh peterh 5:05 pm 22 Oct 08

I think we will see it start to come good. there is a small surge in purchasing by the fed govt, but Tanner has to postpone the reforms from Sir Peter Gershon’s report, and open the floodgates for spending by the departments, the cash injection into the economy should help bring us back from the bottom of the market.

shame that this hasn’t already been done, but there are a few small businesses who it is too late for now. (not here, sydney and brisbane based)

shauno shauno 4:42 pm 22 Oct 08

Its an ideal time to be debt free and have a good amount of cash to take advantage of the bargains floating around now and in the next 12 months. And as protection in case it all goes to shit and I get laid off lol and have to fund my holidays for 18 months until it gets better.

Whatsup Whatsup 4:20 pm 22 Oct 08

I don’t think we are near the bottom yet. I would like to be wrong because a depression will really hurt lots of people.

johnboy johnboy 4:15 pm 22 Oct 08

Buying at the bottom of the last depression made the fortune of a lot of families.

Picking the bottom is the tricky bit.

tylersmayhem tylersmayhem 4:14 pm 22 Oct 08

I hear all of these high times and opportunities for buying properties, cars etc. But I have also heard that looking at the current financial climate, and historical records, we are about due for a depression too. If that is the case, wouldn’t it be the best time to not invest in property, if house prices take a dive after you buy for example?

Thoughts?

misspris misspris 4:06 pm 22 Oct 08

My hubby works in the car industry and I don’t ever remember it being this quiet. It’s scaring the shit out of me quite frankly.

jakez jakez 3:42 pm 22 Oct 08

Whatsup said :

The purchase of a car is rarely a good investment. The stats just show that Canberrians are showing some wisdom and restraint in the current economic climate.

It’s a rubbish investment, and I’m still somewhat annoyed at the opportunity cost of buying my car. My investment will be in the stock market, just before people realise that they probably got a bit carried away with the whole ‘THE RAPTURES THE RAPTURES’ THING.

peterh peterh 2:55 pm 22 Oct 08

Wide Boy Jake said :

This “downturn” hasn’t curbed my spending habits at all, in fact it is a boon and I’m actually spending more. My entire credit card debt will be wiped out when my $1400.00 bonus comes through in December so I’m very happy indeed.

bonus!

wish i was getting one. But then, i have a job. that is a bonus in itself right now.

Wide Boy Jake Wide Boy Jake 2:46 pm 22 Oct 08

This “downturn” hasn’t curbed my spending habits at all, in fact it is a boon and I’m actually spending more. My entire credit card debt will be wiped out when my $1400.00 bonus comes through in December so I’m very happy indeed.

Whatsup Whatsup 2:34 pm 22 Oct 08

The purchase of a car is rarely a good investment. The stats just show that Canberrians are showing some wisdom and restraint in the current economic climate.

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