50% of First Home Owners from 2009 in Trouble

[HomeBuyAU]

According to a finance expert on the 7.pm Project, 50% of the people who took up the FHOG are having some sort of financial problems with their mortgage. I'm not sure how accurate that is but that sounds worrying for the market as this sort of thing happened in the USA before the crash there. Of course there is a lot of housing demand here but with more interest rate hikes tomorrow and continuing through this year every month or two it could be hard for some people.

 

[ianvestor]

50% of FHBs equals what % of the entire market? Not much.

 

[hobo-jo]

According to a finance expert on the 7.pm Project, 50% of the people who took up the FHOG and having some sort of financial problems with their mortgage.

Probably from the same report discussed in this news article: LINK

50% of FHBs equals what % of the entire market? Not much.

Finance for FHBs peaked at almost 30% of all loans in mid 2009. I wouldn't call that "not much", it's the highest percentage of the market in the entire length of ABS records as discussed in this thread. Early 2009 saw approximately 55% of FHBs borrowing at an LVR of 90% or greater.

Interest rates are on the rise and I doubt many of those borrowing at high LVRs fixed their rates.

 

[blaster]

Probably from the same report discussed in this news article: LINK


Finance for FHBs peaked at almost 30% of all loans in mid 2009. I wouldn't call that "not much", it's the highest percentage of the market in the entire length of ABS records as discussed in this thread. Early 2009 saw approximately 55% of FHBs borrowing at an LVR of 90% or greater.

Interest rates are on the rise and I doubt many of those borrowing at high LVRs fixed their rates.

.



Your right Hobo it's not not much , it's a bloody huge chunk.
I don't think there are many people here that actually run their own business because as I've said before 20 or 30% in a business for example and that's what the economy is , will literally make or brake it .

I think the fhog was bloody irresponsible stupidity myself.

Cheers

 

[Fudge]

.



Your right Hobo it's not not much , it's a bloody huge chunk.
I don't think there are many people here that actually run their own business because as I've said before 20 or 30% in a business for example and that's what the economy is , will literally make or brake it .

I think the fhog was bloody irresponsible stupidity myself.

Cheers

Ditto

F

 

[craigb]

i already said that when the rates return to normal there would be some value homes available, wait untill the media hype gets hold of the poor strugling families , then their might be a small panic sell based on their freinds professional opinions,

i said this in another post , but about ,april, may and june, there may be some panic sells, this also depends on what mr stevens does, and how hard they try to return the rates,

 

[Pa1nter]

I have a PDf report called the Great Australia Property Swindle.
Unfortunately I cant post it online as the size is to big to upload,however if you PM me I can email it to whoever want it.
It is great reading about concerned Aussie Homeowners and property investors need to know about the state of the housing market in 2009 (Authorized for release 1/9/2009)

 

[hobo-jo]

I have a PDf report called the Great Australia Property Swindle.
Unfortunately I cant post it online as the size is to big to upload,however if you PM me I can email it to whoever want it.
It is great reading about concerned Aussie Homeowners and property investors need to know about the state of the housing market in 2009 (Authorized for release 1/9/2009)

It's also online here for anyone wanting a look:
http://www.dailyreckoning.com.au/reports/property-swindle.pdf

 

[Pa1nter]

It's also online here for anyone wanting a look:
http://www.dailyreckoning.com.au/reports/property-swindle.pdf

Thanks for that link,

It is a very interesting read and specifically applies to this thread.

 

[craigb]

Bizzare, at first they go on about how prices don't double, then they show you why they doubled , and how it cant go on, but at the end of the day , just an american, sorry i can't hear you!

 

[WinstonWolfe]

This is the monthly ABS data to November 2009.
Note during 2009, many FHBs were taking out larger loans then non FHBs, which was not the norm previously.
And the 2009 peak seems to be testament to the stimulatory effect of the FHB bonus. Only time will reveal the wisdom of this demand driving vendor bonus.
Although I respect the Fujitsu research team, let's keep in mind FHBs are likely to say they have mortgage stress if they can't dine out thrice a week.

 

[The_Bludger]

According to a finance expert on the 7.pm Project, 50% of the people who took up the FHOG are having some sort of financial problems with their mortgage. I'm not sure how accurate that is but that sounds worrying for the market as this sort of thing happened in the USA before the crash there. Of course there is a lot of housing demand here but with more interest rate hikes tomorrow and continuing through this year every month or two it could be hard for some people.

What's the big deal? Rudd will bail them out anyway. Gives homeowners 1 year to find a job if they lose it. The last thing people do is sell their homes.

 

[Propertunity]

....let's keep in mind FHBs are likely to say they have mortgage stress if they can't dine out thrice a week.

I agree. Personally, I doubt the original premise i.e. that 50% of them are in mortgage stress. How do they measure that? and if it is the same way they measured it prior to the GFC then it is a crock of the proverbial.

 

[blaster]

Yeah well that is another angle that's forsure.

Particular fho are so spoilt these days with all the mods , the area , the new cars the lot , it's just gotta be now. Serves 1/2 of them right I reckon.

Why not go further out for starters , drive a bomb for a few years, renovate , find a bargain and start off with 1/2 the mortgage , I don't get it.

Cheers

 

[joanmc]

Looking at Winston's chart, you can see that in 00, 01 and start 02 there were similar high peaks of FHB activity. This was when this form of the grant was originally introduced. 7000 for existing house and 14k for new. When the 14 k was taken away the FHB's dwindled away as a percentage of the market.

Interesting that the boom started just after all those excited FHB's LEFT the market isn't it. Kinds feels like history repeating itself......and the cycles go on.

 

[Shaneelastic]

This bloke who you are referring to is one of the biggest bears going around on basically any assets. He only likes shares and berkshire hathaway at that.

This bloke gets paid to have opinions like this, he needs to direct people to his website to see how they should manage there finances and flog a few books at the same time.

I will admit he writes some good articles about the finance insdustry in Australia and whats wrong with it in his weekly columns.

 

[hobo-jo]

I agree. Personally, I doubt the original premise i.e. that 50% of them are in mortgage stress. How do they measure that? and if it is the same way they measured it prior to the GFC then it is a crock of the proverbial.

You can have the whitepaper on Fujitsu's methodology for housing stress emailed to you here:
https://www-s.fujitsu.com/au/whitepapers/form_anatomy_08.html

It's a question based formula as opposed to a mortgage/income percentage.

 

[Neophyte]

"Stress-O-Meter" sure sounds scientific to me.

The thing that causes mortgage defaults (and therefore forced sales and prices crashes) is job losses.

Interest rates haven't risen 2% yet. Therefore anyone who got approved for a loan should be able to afford current conditions. Even in a years time when most forecasts have rates being around 1% higher the banks calculations should still mean anyone who has kept their job is ok.

The useful question would be How many months buffer do you have if your income suddenly stopped?

 

[bdc]

The useful question would be How many months buffer do you have if your income suddenly stopped?

Just under 3 years not including living expenses...well when house is finished at the end of the month.

 

[Propertunity]

You can have the whitepaper on Fujitsu's methodology for housing stress emailed to you here:
https://www-s.fujitsu.com/au/whitepapers/form_anatomy_08.html
It's a question based formula as opposed to a mortgage/income percentage.

Thank you for that hobo.

According to the survey, just answering 2 of these 3 Q's in the affirmative puts respondents into "mild" mortgage stress category:
In the last six months have you reprioritised your general spending patterns in order to ensure you make your mortgage repayments?
In the last six months have you cut down on luxuries to make sure you can pay your mortgages Y/N?
In the last six months have you spoken to a non-traditional bank Y/N?

Gee I would have thought ALL (or most) FHBs would be doing the first 2 so they can get into home ownership......big deal....a little of that sort of stress would be a good thing IMO.

The rest of the survey looked interesting enough to read, which I shall, when I get some time.