are you saying you would be happy with an 'investment' of 250k that lost 25% in a few weeks? if hes coming from a working class background money is most likely scarce, and the extra repayments he would have saved would most likely have gone a long way.
Rising property values have been an article of faith in the housing market for a generation of Australians who borrowed big as real estate prices marched ever upward.
Now, though, some buyers are finding that their homes are worth less than the size of mortgages taken out to acquire the proverbial roof over their heads.
While the percentage of home owners with so-called negative equity remains tiny - about one in fifty of the 3 million households with mortgages - the number may well swell in 2012 if home prices extend their declines as some analysts expect.
The emergence of a sector of the housing market ‘‘under water’’ on their mortgages may hurt an already fragile real estate market. Any forced sales would obviously dent individual household wealth but further drops in home prices would deter investors from buying residential properties.
Ben Phillips, principal research fellow at the National Centre for Social and Economic Modelling, helped prepare the analysis which pointed to 60,000 households nationwide with negative equity.
"The prospect of negative returns will certainly detract from sentiment through 2012," said NATSEM’s Mr Phillips.
Read more: http://www.smh.com.au/business/new-reality-owing-more-than-you-own-20111221-1p4l2.html#ixzz1h8IpXGh7
209/466 so a 44% clearance rate for the auctions, and the Real Estate agents were talking up a big boom to end the year in NSW due to the stamp duty concessions changing. It seems as though that didn't happen as predicted.SYDNEY'S housing market ran out of steam at the weekend with buying activity in full retreat over the past month, and the clearance rate hitting a record low for the year.
Tellingly, the median price of houses sold at the weekend collapsed to the lowest recorded for the year. This result reflects the surge in first home buyers and the continued stagnant nature of the prestige property market.
A relatively large number of 466 properties were up for auction on the final selling weekend of the year. That number was 11 per cent higher than the 420 properties auctioned on the same weekend last year.
Of the 349 properties reported auctioned, 209 sold and 68 were withdrawn for a year-low clearance rate of 50.1 per cent.
The total value of properties sold was $128.1 million, at an average value of $612,919 per property.
FOREIGN developers have grabbed a 30 per cent share of Australia's apartment market, a trend not repeated since the Japanese office and hotel development boom in the late 1980s.
Overseas investors are behind 13,000 apartments in 37 projects in Australia. Based on the average number of apartments completed in 2011, that represents a market share of as much as 32 per cent, research by the property group CBRE finds.
....
The sheer number of apartments being built has prompted concerns about oversupply.
http://smh.domain.com.au/real-estate-news/asian-money-pours-into-city-apartments-20111221-1p4in.html
the way I read it was he was buying it for himself and his future wife to live in, All the features he was happy paying for are still there, he can still build a life with his partner, Nothing has changed.
If I bought an investment and a week later i realised I had over paid, I would be be upset with myself and be searching for lessons I can draw from the experiance,
A few interesting articles on SMH today that are very negative in regards to property, which is unusual.
2% of homes have negative equity, hard to tell if that is a meaningful statistic without knowing any historic trends, but it doesn't sound good.
209/466 so a 44% clearance rate for the auctions, and the Real Estate agents were talking up a big boom to end the year in NSW due to the stamp duty concessions changing. It seems as though that didn't happen as predicted.
I think this is the first time I have ever heard anyone talk about possible oversupply in the Australian market. We are constantly bombarded with the under supply argument, that to see a journalist discuss oversupply after many massive apartment blocks are underway is very different.
It took me by surprise seeing 3 negative articles on the same day.
...and the Real Estate agents were talking up a big boom to end the year in NSW due to the stamp duty concessions changing. It seems as though that didn't happen as predicted.
1, and what lessons can be drawn from this tyson? dont listen to spruikers developers and RE agents?
2, you may be of the opinion i am negative what with my bearish outlook, but for things to crash is a positive for me. so long as i have work.
1, Offcourse, that is always a big lesson, just as you should never ask a barber if you need a hair cut,
2, Offcourse lower prices are good for anybody who is a net buyer, myself included. I like lower asset prices not matter whether it be property or shares, But the market the market doesn't care what you or I think or hope, it is what it is, So I have set my self up to be in a postion to benefit not matter what happens.
Putting property aside, My personal belief is that you are far to bearish and don't have enough exposure to the upside, But each to his own, I am either right or wrong.
'Land bankers': Sydney's empty property magnates
The Wakils, of Bellevue Hill, are directors of Citilease Property Group and own many empty properties, including the Griffith's Tea building in Surry Hills and two multi-storey buildings in the CBD.
According to sales records, some of the larger buildings were bought for more than $7 million in 2003 and the total value of their properties has been valued at around $75 million.
Their collection of empty warehouses, buildings and the pub are among the startling figure of 122,211 empty Sydney residential dwellings counted by census workers in 2006.
Some of these mysterious, empty buildings dotted around the city act as temporary homes for groups of squatters.
...
Real Estate Institute NSW chief executive Tim McKibbin said "land banking" - or leaving land vacant and watching it increase in value - was a common investment method used by developers.
But Mr McKibbin said it was unusual to do the same with commercials properties, which could attract an even greater profit.
"It is a perplexing question and I'm afraid one I can't give any clarity to," he said.
"That seems to be their investment strategy.
Housing shortfall blows out
A CURRENT shortfall of 215,000 homes Australia-wide has prompted calls to reform land and sales taxes to cater to the growing demand for rental accommodation.
Despite the slowdown in building demand and house prices, the 2011 State of Supply report from the National Housing Supply Council found that the gap between housing supply and population demand increased by 28,000 over the past financial year.
At current population growth, Australia's housing shortfall is expected to blow out by more than 640,000 over the next two decades.
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The council's formula for calculating the shortfall incorporates building trends such as affordability, demolitions and approvals, and population trends such as migrant intake, homelessness and household transitions.
The ambitious land release programs on Melbourne's urban fringe in the past year have ensured that Victoria's housing shortfall (17,600) is significantly smaller than either NSW (73,700) or Queensland (61,900). About 14,000 lots were released in greenfield sites in Victoria this year, with a further 37,000 to be made available early next year.
However, greenfield development will not supply the 630,000 to 930,000 extra homes the state will need in the next 20 years, warns the council's chairman, Dr Owen Donald.
Todays top two property articles on the Sydney Morning Herald
#1 Property oversupply
#2 Property under supply
One author is claiming 120,000 empty properties in Sydney, and the other is claiming a housing shortage of 80,000 in Sydney...
Interesting strategy of 'land banking', I have seen plenty of long term empty buildings around the place, and always wondered why the owners don't lower rents to try and get some cash flow. It seems they are not too worried by it all.
Then it is followed by the undersupply issue.
Todays top two property articles on the Sydney Morning Herald
#1 Property oversupply
#2 Property under supply
One author is claiming 120,000 empty properties in Sydney, and the other is claiming a housing shortage of 80,000 in Sydney...
Interesting strategy of 'land banking', I have seen plenty of long term empty buildings around the place, and always wondered why the owners don't lower rents to try and get some cash flow. It seems they are not too worried by it all.
Then it is followed by the undersupply issue.
My apologies..nhsc do in fact have it right. I didn't read about the squatters. Surely once they're kicked out they will be looking for a place to buy in the burbs and start a family, this will most certainly create even more of a housing shortage
You meant nhsc got it wrong?
Where do these squatters find the money to buy new houses to move in anyway? And why they don't do so now even if they can already afford it? Is it because there are absolutely no houses on sell? (shortage) Or there is a shortage of houses at an affordable price?
http://www.abc.net.au/news/2011-12-27/property-prices/3748490"Melbourne house and unit prices fell by 5.7 per cent, making it the second worst performing city in Australia.
Mr Kusher says prices have been sliding for four years and there is an oversupply of new housing on the Melbourne market.
"That could make any recovery further away because there is ample supply," Mr Kusher said.
"When we look at markets like Sydney, and then to a lesser degree Brisbane and Perth, the housing supply hasn't kept pace, so that's supporting the market somewhat.
"But Melbourne's had very sufficient supply and it's had very strong growth in property prices, and now affordability is really hampering that market."
http://www.reiv.com.au/~/link.aspx?_id=F86BFA7729DF4E22B9FB036CD6EFD36F&_z=zThe total value of auction sales was $11.6 billion compared to $16.8b in 2010,..
Off to London tomorrow (28th Dec 2011) to see first hand the devastation of the falling house prices throughout Europe and the impact it has had on the proletariat. Bon Voyage........... Oh yeah .... almost forgot ...... to stand underneath Big Ben when it chimes 12 times to ring in the New Year known as 2012.
I don't think you'll find much "devastation" there.
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