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House prices to keep falling for years

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The main purpose of the example was to demonstrate how rental changes can affect the equation and that different markets can show different characteristics. In relation to the interest-only vs P&I it really comes down to the goal of the investor/purchaser and their appetite for risk I suppose.

I've never used interest only loans, I always pay down the principal as well but I can see why people may use them to bump up their leverage - which like all leverage if done at the right time will work wonders and done at the wrong time will send you bust.

And nobody should misconstrue the example as any kind of encouragement to buy or sell property at the moment - as I say the purpose is to provide a balanced viewpoint. I think that its understandable to be nervous about both the economy and property markets at the moment. (though the inflation genie is always something to keep an eye out for as well).
 
In the old days, apparently they were getting pretty lax on proper valuations as the market was booming.. Now (from reading anecdotal) they're starting to get a bit stricter on what they finance, and tougher valuations before approving the loan.

If the bank doesn't think the property is fairly valued for the amount they are lending, they won't approve the loan, simple. In the current environment, the banks are going to be a lot more careful on evaluating what they think the property may be worth before even approving the loan. The risk to both the borrower, and more importantly them is higher in a slow market if a forced sale is required.

Also a problem for those using equity to buy further investment properties. What they "thought" they had as equity the banks may not quite see as high in dollar terms, denting some investors demand for obtaining more and more IP's.

That's where the market has changing between now, and this time last year.

Anyhow, year is pretty much over No many sales I would imagine in the next few weeks leading up to xmas. First quarter will be interesting times. Could be recovery, could be things getting worse. I'm sure many potential sellers decided to wait it out until 2009 for the large number of listings to clear before giving it another go.
 
For interest.. here is current FHOB share of market. Approximately: 20%
 

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gfresh said:
For interest.. here is current FHOB share of market. Approximately: 20%
Click to expand...

Wow! Now there's a clear upward trend there in FHB numbers (at least proportionally) that has gone pretty much un-reported! It does however support anecdotal evidence that things in the sub $500k end of the market have actually been picking up - both volumes and prices, in the last couple of months in Sydney. Will be very interesting to see if that upward trend continues in Q4 (I expect it has).

Thanks for finding and posting that.

Cheers,

Beej
 
Here it is broken down by State. NSW has definitely picked up in the FHOB proportion this year.
 

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Jeez! I stop by to say G'day and this thread is still going around in circles. LOL

FWIW, The UK market is swirling down the toilet with astonishing speed with Crash Gordon furiously trying to prop it up.

Auction Prices are back to 2001 levels in a lot of cases and not bad buying. But mainstream vendors asking prices are still in lala land with nothing moving at all. Lenders are basically demanding 75 - 60% LVR for the prime rate, with almost no deals at all at less than 15% deposit.

(Which IIRC was how it always used to be)

Anyway... just saying hooroo.
 


Holy **** batman !

Welcome back

Please post lots of scary bear pRon
 

Haha...I wondered what had happened to you until I saw you on HPC. Not enough bear food here for you?
 
Will banks lent if they know the market could or is in dire straights?
Who foots the bill with mortgage insurance if a whole lot of properties tank?
If you were a bank manager wouldn't you want a lot higher deposit or just be the the rest and think this is a slight down turn?
I wouldn't be lending money to any one for any thing in this climate.
 
First home buyers are like lambs to the slaughter,i think its an absolute disgrace that the grant has been increased
They will be the first ones to lose their homes once unemployment kicks in

Minimum deposit
Minimum savings record
Minimum equity
Helping hand rubish,more like helping them put a noose around their neck

 

Glen, its heading the way it is in the UK. Soon anyone without at least a $100k deposit will not be able to buy. This will completely remove first home buyers from the equation, with disastrous effects cascading up the chain.

Its time to batten down the hatches and save, save, save.

...but then again...this is Mars...and here things are different
 

hello,

gee sounds familiar?

thankyou
robots
 
a. Yes, there are always good clients to lend money to
b. The Mortgage Insurers (they are seperate companies)
c. Lending criteria has completed most of the tightening phase already
d. Each to their own
 

http://au.biz.yahoo.com/081124/2/224lg.html
 
hello,

awesome news Number, what a ride man

want be too good for the people piling the dollars into those online "high" interest (cough cough) accounts

as long as you doing something though,

few more $ for some cafe latte's and ruski's after 2nd December 2008, just helping out the economy

thankyou
robots
 
hello,

wont be to many negative gearer's around soon Pommie after looking at the article Number posted,

neutral and positive more like it , now what is it? we all buy on yield

money box crew will have to go a bit harder on the savings, ING down to 5.5%

what a day pom,

thankyou
robots
 
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