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All is Not Well in Oz

  • 03-08-2012 10:02pm
    #1
    JupiterKid
    Moderators, Social & Fun Moderators Posts: 13,101 Mod ✭✭✭✭


    It looks like Australia is heading into a spectacular property crash, with the boom that the country has experienced over the past decade, driven by huge demand for commodities such as minerals and other raw materials by manufacturing giants like China, now faltering.

    Recent reports indicate that a property bubble has been inflated to such an extent that recent buyers of new housing developments in and around the major cities such as Melbourne, Brisbane and Sydney are facing sharp drops in house prices and negative equity.

    However, lenders are still offering 100% mortgages to buyers of houses in fringe commuter locations. Sound familiar anyone? Quite a bit of denial going on the the comments too.

    Link:
    http://theage.domain.com.au/real-estate-news/home-owners-facing-loan-repayment-disaster-20120708-21pkl.html


    And here:
    http://www.macrobusiness.com.au/2011/04/collateral-damage/


Comments

  • #2
    Slydice
    Registered Users, Registered Users 2 Posts: 10,501 ✭✭✭✭Slydice


    Might be no harm reading up about how Chinas economy is doing too. China pumps a lot of money into "Oz" and so the direction of their economy will contribute to anyones research on this.


  • #3
    Solair
    Closed Accounts Posts: 7,230 ✭✭✭Solair


    I don't think there's much doubt that Australia's in a bubble at the moment. It may not crash out of it as spectacularly as Ireland did, but anything's possible.

    I certainly wouldn't rush to purchase anything there just yet. Give it a couple of years and see what shakes out.

    Any property market seeing that kind of growth has potentially formed a huge bubble, so it's worth just playing it safe as you can completely wreck your life by getting into an unaffordable mortgage on a property that is in permanent negative equity.

    I would advise anyone in Australia to proceed with extreme caution when it comes to the property market and remember that just like in Ireland, the locals will entirely believe their own hype.


  • #4
    ixus
    Registered Users, Registered Users 2 Posts: 2,435 ✭✭✭ixus


    Been watching this unfold on thepropertypin for the last three years.

    The signals have been coming for a while. Sydney is the most expensive city to live in now if I remember stats correctly. People have been complaining for a few years of struggling to make ends meat in the good times due to house/rent prices.

    It's just a matter of time.......


  • #5
    RATM
    Closed Accounts Posts: 3,591 ✭✭✭RATM


    Had a thread on this very topic a couple of months ago-
    http://www.boards.ie/vbulletin/showthread.php?p=78978480

    Melbourne prices are down 8% since May 2011, Sydney prices dropping 3.6%. It seems like the small price drops they've had so far are now beginning to speed up, with a drop of 1.2% recorded in a single month. FTB'ers are baulking at paying AUD$800,000+ for good houses in good suburbs so they're sitting on the fence, despite really low interest rates.


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