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Sigh.
“Don’t wish things were easier, wish you were better”.
I know, I know – Jim Rohn quotes are pretty corny sometimes aren’t they?
But oh so TRUE.
A bit bonkers this week, the parents are away which means that it’s yours truly’s turn to dog-sit for them for a couple of weeks.
Not that I mind, look at that little fluff ball:

Feels good having her around. I mean, MrsFrugalSamurai is good and all… but she can’t give me licks down “there” y’know?
Points to feet. (I know what you thought, wacko).
Still, as pleasurable as her feet licking is, there comes a time when even a dog knows not to do it straight after master comes home from a hard day’s work.
I guess that’s the gauge of how hard you actually worked…
Ahem, anyway enough about dogs and their voyeuristic ways, because in the last couple of days we’ve had some pretty big news here in Australia.
Of course, over the weekend, the centre-right liberal/coalition party won the national election unexpectedly which was seen as a boon for businesses and the economy.
Then we had news that our financial regulators were going to relax borrowing measures for home-buyers – since 2014 they had implemented a servicing “buffer” when calculating a person’s borrowing capacity. This buffer was set at 7% interest rate on loan repayments (lenders typically used 7.25%).
Whereas the actual borrowing rate on a loan is usually around 4-5%.
It’s still early days, but by removing this buffer, you’d expect servicing calculations to be slightly relaxed to around the mid-6’s I imagine.
Which means extra borrowing power, which means we can borrow more money, which means we can spend more – YAY!
Oh, and of course, our central bank – the Reserve Bank could not have been more clearer in releasing it’s last meeting minutes with the short-term future of the official cash rate (1, possibly 2 cuts in near-term), again giving a boost to our economic predictions.

So what then – that’s good right?
Um, yeah it can be good, but I’m not convinced.
I mean, yes the liberal party coming to power provides certainty and a bit of stability for markets (markets love certainty and stability), and yes the relaxing of credit is good news for our property sector…
BUT, and there’s always a but, I think the cutting of interest rates leaves the RBA with a very small margin of doing anything in a global economic climate looking decidedly shaky.
Just thinking big picture here.
No government policy, no matter how good can boost markets as well as a fully firing economy.
Similarly, no housing market can rise without the benefit of a fully functioning economy, no matter how much people can borrow.
And that’s what it boils down to – the economy.
In all fairness, the RBA’s hands are tied, they can only try and get ahead of the recent negative economic reports that have been released – unemployment, retail sales, home sales etc. etc.
But still… don’t you get a feeling we’re just… how best to put it…
“As long as the music is playing, you’ve got to get up and dance”.
That was said in July 2007, and we all know what happened a year later.
So I’d be very interested in watching this space in the short-medium term to see how far the run up this boost can have.
But at the same time, I’m continuing to take money off the table, sitting idly in cash waiting for when valuations turn more “attractive”.
Until then, where did that dog go?
Here girl, c’mere girl.
Takes socks off.
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P.S. As always, all posts are the opinion of a boy-genius sitting behind the thin veil of cyberspace. Much research must be completed before you make any financial decision, but you’re here. There are worse places to start!
34 Comments
You, Me and Benny
Your dog is so sweet! One of mine is snuggled up to me and the other is snuggled up on the couch! haha They do what they want here.
The Frugal Samurai
Yes she is! She’s a real princess but… nice ones – sometimes I wonder if the dogs rule us or we rule them!
You, Me and Benny
they definitely rule us haha
The Frugal Samurai
Hahaha love it!
Kat Johana
this is such an interesting post. I liked reading your opinions!
The Frugal Samurai
No problems – thank you for reading 🙂
viewfromthebeachchair
I think it is like that all over. We need the economy to stay up until we sell our house! It is exhuasting being on this cycle.
The Frugal Samurai
Exhausting! Wow, first time I’ve heard people say that – when are you guys selling out btw?
arrows+attitude
Interesting read!
The Frugal Samurai
Thank you!
Ashley K.
Such a cute doggy! They definitely keep life interesting.
Hopefully the economy stays up for awhile. It definitely helps in so many aspects, not just in the housing market.
The Frugal Samurai
Haha yes she does… and totally agree, a good economy is good for all of us. Thanks for reading.
Shnooks GF
Well,as an econometrics student I would say that this is kind of a déja vu as you said “subprime crisis” and it’s all
because of central bank manipulating interest rates and creating artificial demand and that encourages individuals to spend money without thinking of the consequences ! I wish that central banks would be more aware of the ethics of central banks! (I tried my best to explain 😅 I’m studying in French so my therms aren’t quite exact in English !)
The Frugal Samurai
I got it don’t worry! Haha manipulating interest rates is kinda harsh, but with all of the recent QE going on… who knows what effects this will have when it all rewinds in a hurry?
The Crumby Vegan
Ah I didn’t know this was happening in Australia. I know there is a boom in house prices which is slowly now crashing in NZ but is that affecting you guys at all?
The Frugal Samurai
Yes! It is, the housing market has dropped a fair bit from its peaks, our two largest capitals Sydney and Melbourne are about 10-15% off the peaks…
Luna S
Great read! Your parents dog is so cute, hopefully dog sitting goes well the whole time.
The Frugal Samurai
Thank you and thank you for reading!
Cendu Param
The housing market drives me nuts! we bought 6 years ago and literally are not moving again because i just can’t deal with it. the toronto housing market is just skyrocketing prices
The Frugal Samurai
Ouch, you guys live in Toronto? Man we have friends in Vancouver and they say things are crazy in Canada… how do you guys cope! Hopefully 6 years ago was a good time to buy?
Pool Operator Talk
This was very interesting!
The Frugal Samurai
Thanks for reading!
Sanjota Purohit
I’m have different opinion but I liked the way you presented yours!
The Frugal Samurai
What’s your opinion?
honeybunnytwee
I actually briefly studied abroad in Australia and I actually love reading about other governments and what’s going on abroad! Nerdy, I know but I appreciate the share
The Frugal Samurai
No problem, did you enjoy your time over here? Where’d you study! So many questions, so little time…
Ivan Jose
The economy must be doing good if the central bank is encouraging spending.
The Frugal Samurai
Hahaha, no it’s not going that great at all… wish it was though! Thanks for reading.
Jennifer Sikora
Your little dog is so adorable!! We are trying to buy a house right now and it’s torture! I’ll be glad when this process is over!
The Frugal Samurai
Yeah she is! Man, tell me about it – the process is just brutal, g’luck with it!
blair villanueva
Economies are going up and down like a roller coaster ride!
The Frugal Samurai
It sure is!
Elizabeth O
What a cycle…just like life itself and the changes we all experience. I’m always for up…
The Frugal Samurai
Of course, better up than down as they say! Thanks for reading.