Aussie Nirvana?
Tales telling of hordes of our disillusioned heading for the ‘lucky’ country, Australia, have been all over the media of late. All is seldom as it seems, however as according to the Australian Sunday Mail publication, some12% of all Queensland homes are worth less than the value of the mortgage they carry. In far northern Queensland the figure gets as high as 22.6%, the Gold Coast shows 19.4%, Sunshine Coast 15.5% and Brisbane City shows 9.2% of mortgaged properties have negative equity! That is an astounding set of figures and worrisome when you consider that Qld. is the state of choice for our countrymen. Fox Symes is Australia’s largest debt consolidation agency, specialists in refinanced debt; they comment in the article that increasingly refinancing is impossible and that borrowers struggling under their debt burden find themselves unable even to sell their property to solve their problems.
Aussie lenders do lend to a very high loan to valuation ratio, the highest quoted in the article was 98%! Even the standard trading banks offer 97% (Anz, Westpac, Queenslanders credit union among them). Given that Brisbane Real Estate prices for example fell 6.8% last year and are now some 9% below their peak it becomes easy to see how problems could arise and borrowers find themselves between a rock and a rock.
When you consider the distant world little old NZ is doing well; particularly when compared with Europe. Simply staying afloat when all else around you is sinking is actually a great success and whilst growth here is an unimpressive 1.1% it certainly looks stunning against the 6-8% economic contractions of Spain, Greece and other PIIGS. A good indicator of how things are in the UK comes from Tony Alexander who notes that the Nationwide Consumer Confidence index has fallen from ‘very depressed’ to ‘horribly depressed’.
With the US real estate market showing signs of life, Aussie holding firm against the tide and New Zealand moving slowly forward we can look forward to our future with some confidence; especially as lift will come as the long awaited Christchurch rebuild gets under way.
Real Estate news in our part of the world is dominated by the headlong rush to new price highs in various parts of our city; long predicted by Tony Alexander – since 2004- as demand increasingly exceeds supply. Even here in the Eastern Suburbs, intoxicating tales of superb prices achieved, leave one breathlessly wondering where it all might end. I can say with some confidence that building costs are definitely on the rise; land is hard to find and is expensive in sought after areas and even the not so sought after. Good news if you are in the market already, not so hot if you are trying to get a foot on the ladder.
Winter Sales
In a previous communication I mentioned that over the last 4 years there was virtually no difference in the figures for sales effected in the winter as opposed to the rest of the year, contrary to the commonly held idea that Spring / Summer was the time to do the business.
You heard it first here; combined with an increasing shortage of homes available to be purchased this is truly a very good time to make your move.
May 29 2012 05:40 pm | Uncategorized