fish.01 Posted April 17, 2011 Share Posted April 17, 2011 Average mortgage in australia is the same as the uk. Link to comment Share on other sites More sharing options...
Guest chris955 Posted April 17, 2011 Share Posted April 17, 2011 I'm not sure the size of the mortgage is the issue really, I would have thought the problem would be 100's of 1000's of people being plunged deep into negative equity Link to comment Share on other sites More sharing options...
fish.01 Posted April 17, 2011 Share Posted April 17, 2011 I'm not sure the size of the mortgage is the issue really, I would have thought the problem would be 100's of 1000's of people being plunged deep into negative equity Given the value of houses compared to the mortgage there is a lot of equity in Australia. Negative equity becomes a problem with high unemployment. Given the forecasts Australia seems a safer bet for lower unemployment relative to others. There are risks everywhere in the world, so it is all about relative risk....no where has a guarantee. Link to comment Share on other sites More sharing options...
Guest TheLege Posted April 17, 2011 Share Posted April 17, 2011 The "high equity" of Australian home-owners is a bit of a myth peddled by the property industry and ignorant journalists -- this 'average' figure is flattered by old mortgages in the process of rolling off. There is still a boatload of 95% mortgages out there and you only need a few of those to go bad to set the ball in motion through higher supply. Plenty of those who've bought a home in the past 3 or 4 years are mortgaged to the eye-balls and struggling to meet the higher mortgage costs. Also, the idea that the Australian market is vulnerable only to high unemployment is garbage. The U.S. housing market started its descent when unemployment there was 5% (pretty much where Australia's is now). There's plenty of evidence around to suggest that Australia's long overdue correction has already begun - just don't look for it in the mainstream media, who generally prefer: sun's shining, stocks are up, the barbie's on and we're all going to make a mint out of housing. Any bad stuff that happens is generally overseas, which is fine by us. Sadly, no quality news outlets over here like The Guardian or Channel 4 News Link to comment Share on other sites More sharing options...
fish.01 Posted April 17, 2011 Share Posted April 17, 2011 Certainty and conspiracy theories. What's happened to the kids of today? :biggrin: Link to comment Share on other sites More sharing options...
Steve99 Posted April 18, 2011 Share Posted April 18, 2011 Average mortgage in australia is the same as the uk. However later entries to the market, especialy those who took up the so-called extended-first-homebuyers grant along with what were very low mortgage rates at the time 2 years ago are now feeling the pinch in a big way, they were bribed into the market with no one, the government (state or federal) newspapers, RE agents etc etc telling them that mortgage rates may well go up a whole lot more, and to date thats exactly what did happen. A big difference between the UK right now and Australia is that many in the UK have the lowest interest rates since the BOE opened its doors over 300 years ago, ie as low as 1% for some whereas in Australia most people are on variable rates of around 7.5% right now. UK house prices would collapse overnight if they had to do 7.5%. Australia is now bound pretty much to high interest rates due to the extensive foreign carry-trade loans used to finance the housing market, drop the rates and suddenly there will be far less finance for housing which still is probably the most plentifull in the western world right now. Link to comment Share on other sites More sharing options...
Parley Posted April 18, 2011 Share Posted April 18, 2011 Australia's rates are not high in historical terms. They are currently at normal levels. 2 years ago we were in the GFC, and rates were reduced to abnormally low levels to stimulate the economy. that was never going to last long. UK is a basket case economy wise, hence the extremely low level of rates. Link to comment Share on other sites More sharing options...
fish.01 Posted April 18, 2011 Share Posted April 18, 2011 However later entries to the market, especialy those who took up the so-called extended-first-homebuyers grant along with what were very low mortgage rates at the time 2 years ago are now feeling the pinch in a big way, they were bribed into the market with no one, the government (state or federal) newspapers, RE agents etc etc telling them that mortgage rates may well go up a whole lot more, and to date thats exactly what did happen. A big difference between the UK right now and Australia is that many in the UK have the lowest interest rates since the BOE opened its doors over 300 years ago, ie as low as 1% for some whereas in Australia most people are on variable rates of around 7.5% right now. UK house prices would collapse overnight if they had to do 7.5%. Australia is now bound pretty much to high interest rates due to the extensive foreign carry-trade loans used to finance the housing market, drop the rates and suddenly there will be far less finance for housing which still is probably the most plentifull in the western world right now. "no one, the government (state or federal) newspapers, RE agents etc etc telling them that mortgage rates may well go up a whole lot more" Have you been here long? Almost every man, woman and child in Australia would know the rates have been on the lower side in historical terms here. They are discussed and commented on continuously. The level of rates is discussed extensively in the press. Of course some people would not listen to anything told to them, but to suggest there is some big organised conspiracy between governments of different political backgrounds, editors of different newspapers and real estate agents just does not reflect real life. Link to comment Share on other sites More sharing options...
Steve99 Posted April 18, 2011 Share Posted April 18, 2011 "no one, the government (state or federal) newspapers, RE agents etc etc telling them that mortgage rates may well go up a whole lot more" Have you been here long? Almost every man, woman and child in Australia would know the rates have been on the lower side in historical terms here. They are discussed and commented on continuously. The level of rates is discussed extensively in the press. Of course some people would not listen to anything told to them, but to suggest there is some big organised conspiracy between governments of different political backgrounds, editors of different newspapers and real estate agents just does not reflect real life. Not a consipracy, no, just a very blatent attempt to keep new people signing up for mega mortgages. The FHBG was designed to prop up the property market, not help first homebuyers, a couple of years ago we had a mad rush to get into real estate and a lot of forward buying took place, a lot of first home buyers took a big risk and at that particular time the low interest rates were quoted as 'an excellent time to get into the market' . Remember who the goverment serves, firstly and at all times it is the banks, just like in the USA/UK, if its good for the banks its good for Australia etc etc, hence the implied bail outs (in waiting) and the never ending carry trade to prop up the banks balance sheets. Pushing many potential purchasers into buying was part of this process, keep the pressure on prices otherwise the banks are in the proverbial As for Aus economy, sorry pal, its become a one trick pony and lots of business models are suffering on account of the mining boom and the inflow of foreign cash (high Aus$$ and reletive rates) If it carries on as such, and probably will, then we will have a home grown recession even though the national accounts say we are booming. Link to comment Share on other sites More sharing options...
Steve99 Posted April 18, 2011 Share Posted April 18, 2011 Australia's rates are not high in historical terms. They are currently at normal levels.2 years ago we were in the GFC, and rates were reduced to abnormally low levels to stimulate the economy. that was never going to last long. UK is a basket case economy wise, hence the extremely low level of rates. To Add, well since the rates dropped and the FHBGrant was extended we have magicaly increased house prices by around 20%-25%, ie we had 2 years extra of mania (stimulation) and in that respect it worked, however people have been squeeking quite a lot about even one more piddley widdley 1/4% interest rate rise recently which shows you how quickly people can align them selves to what you might call 'favorable' conditions and how difficult they will find it to return to 'normal' interest rates. The problem is, that people cannot afford to keep buying into the real estate market at todays prices and interest rates.. Prices went up on account of the low rates and other stimulous but if they dont come down as interest rates rise then market will be effectively dead. Seems the VI's never forsee the other side of the free ride they are all signing up for. Niether buyers, REAgents, Government nor media. I would guess that for the average Ausie worker, we also will end up being an economic basket case within a couple of years, re the 'Dutch desease' we are now catching in a big way. Link to comment Share on other sites More sharing options...
Parley Posted April 18, 2011 Share Posted April 18, 2011 I do agree that the First Home Owners Grant has probably pushed up the price of houses so the vendors end up getting the money. They should have named it the Home Vendors Grant. Don't agree with the rest of what you say though. No likelihood of recession happening, as employment is growing. The carbon tax may have an impact down the track, we'll have to wait and see. Is there ever a perfect time to buy property ? Link to comment Share on other sites More sharing options...
fish.01 Posted April 18, 2011 Share Posted April 18, 2011 Sorry pal, I don't agree either. Too many 'I'm the expert' definitive statements mixed with rubbery figures to back it up - lack of balance :wink: Link to comment Share on other sites More sharing options...
spottydog Posted April 18, 2011 Share Posted April 18, 2011 Is there ever a perfect time to buy property ? There is a perfect time for an individual to buy a home, not necessarily for an investor to buy a property. I bought at the perfect time for me, a house that I loved came on the market and I could afford it, a year later despite the huge mortgage and the sacrifices I'm making to buy it I still can't help but smile every time I get to the front gate. Link to comment Share on other sites More sharing options...
legoman Posted April 18, 2011 Share Posted April 18, 2011 i just go by what I see happened in other countries. uk, usa japan etc, all were riding high,big boom times money thrown at you loans, houses prices no probs, then as always...the bubble burst and all fall down, will always happen, the uk and other in the doldrums will again have their day in boom times and will busts again, those riding high will bust, before rebuilding. those sensible enough to realise this will live accordingley and be prepared, good and bad times dont last forever. Link to comment Share on other sites More sharing options...
Guest mikewheble Posted April 20, 2011 Share Posted April 20, 2011 This is a great thread in which everyone is talking about real life and not just sunshine and beaches...keep it up. Link to comment Share on other sites More sharing options...
legoman Posted April 20, 2011 Share Posted April 20, 2011 these threads are very beneficial to those thinking or going to oz, as long as nothing gets personal we all gain invaluable info on things, I have lived there before but still find good info on pio which I wasn't aware of before. its what this site is all about. Link to comment Share on other sites More sharing options...
heyyu Posted April 20, 2011 Share Posted April 20, 2011 i remember paying 18% interest and surviving Link to comment Share on other sites More sharing options...
Guest chris955 Posted April 20, 2011 Share Posted April 20, 2011 And of course many others didn't. Link to comment Share on other sites More sharing options...
heyyu Posted April 20, 2011 Share Posted April 20, 2011 no, most managed low unemployment i was working as a builders labourer Link to comment Share on other sites More sharing options...
Addy Posted April 20, 2011 Share Posted April 20, 2011 no, most managed low unemployment i was working as a builders labourer I remember that too. Our mortgage was £560 interest plus repayment plus insurance in 1990. Which was a lot of money at the time - our loan was only £48K. We had to put off doing remedial works to the house for 3 years.. ie central heating.. new roof.. just a few essentials! People's loans are so much larger today so a 0.25% increase is a lot more to pay. Link to comment Share on other sites More sharing options...
Graemsay Posted April 20, 2011 Share Posted April 20, 2011 A couple of links from the FT Alphaville Blog. Why no Australian and Canadian housing busts? Live and lend loose, or, mortgages down under I don't know what's happening with the Oz property market, or where it will go, but Melbourne fell by 6% in the last quarter (an annualised 24%), so the possibility of a bumpy landing remains. My concern would be that falls in property prices tend to be a leading indicator of a recession. If there is a bubble in Oz and if it bursts then the economy there is going to take a kicking. Link to comment Share on other sites More sharing options...
Addy Posted April 20, 2011 Share Posted April 20, 2011 A couple of links from the FT Alphaville Blog. Why no Australian and Canadian housing busts? Live and lend loose, or, mortgages down under I don't know what's happening with the Oz property market, or where it will go, but Melbourne fell by 6% in the last quarter (an annualised 24%), so the possibility of a bumpy landing remains. My concern would be that falls in property prices tend to be a leading indicator of a recession. If there is a bubble in Oz and if it bursts then the economy there is going to take a kicking. Those are my thoughts too. We were thinking of buying but we shelved that idea a few months back when things started to look dicey. Link to comment Share on other sites More sharing options...
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