Another gloomy property story in the sydney morning herald.
http://www.smh.com.au/news/national/mortgage-dreams-drift-off-the-plan/2005/11/25/1132703380778.html
THE number of properties seized and sold by lenders after mortgage defaults is on the rise after more than $60 billion has been slashed from the value of the Sydney property market since the city's house prices peaked two years ago.
As house prices continue to sag following the boom, there is evidence the number of mortgagee sales has increased. An agent at Laing+Simmons Double Bay, Rod Fox, said he had seen the number rise significantly in the past year.
"I believe we have had close to 30 mortgagee sales this year," he said. "I've got one coming up for auction in December and my colleagues have another one or two."
An agent with Richardson & Wrench in Rooty Hill, Shayne Douglas, said mortgagee sales had picked up by 10 to 20 per cent in the past six months.
"There has definitely been an increase, there's a lot more mortgagee sales now than there were two or three years ago."
The Herald used data on the number of residential properties and median house and unit prices to estimate the value of Sydney's 1.7 million dwellings. They reached about $850 billion early last year but had fallen to about $785 billion by the end of September - $60 billion-$65 billion less.
The median Sydney house price, calculated by Australian Property Monitors, has fallen by $50,000 to $520,000 since the market peak. And the median unit price is down $24,000 to $357,000. The figures were composition adjusted to balance different sectors of the market.
The most expensive 10 per cent of Sydney houses have registered a bigger proportional loss than the average. Their median price is down from $1.38 million to $1.18 million.
That fall, of $200,000 or 14.5 per cent, is much more than Australian Property Monitors' estimate for the city-wide average fall of 8.9 per cent.
"The [housing] price bracket from about $900,000 up to around $1.3 million is the bracket that has suffered the most," the monitors' research director, Louis Christopher, said.
Mr Fox said the number of mortgagee sales had risen because people had borrowed too much at the peak of the property boom and were having trouble meeting mortgage repayments.
"Look at what people paid two years ago, they paid top dollar for off-the-plan developments and now the market has come down considerably for that type of property," he said.
Most properties sold in mortgagee sales fetched much less than the owners originally paid for them, Mr Fox said. "With one of my past sales in Rose Bay, the owners paid $792,000 and it sold for $720,000."
The director of Richardson & Wrench in Bondi Junction, Andre Frack, said they had been selling a property for the owner, but halfway through "the owner wouldn't accept an offer and the bank ended up taking possession and accepting the same offer".
The number of mortgagee sales was up because people who had bought off-the-plan during the boom could not afford repayments, Mr Frack said.
The chairman of Wizard Home Loans, Mark Bouris, said the percentage of defaulted loans on its books had risen from 1.1 per cent to 1.3 per cent from mid last year to mid this year, which was not considered a "significant increase".
CITY SEIZURES
- Two bedroom terrace in Bondi Junction bought for about $850,000 two years ago sold recently for about $800,000.
- One bedroom unit in the city was bought two years ago for about $510,000. Similar properties in the same building now sell for $420,000.
Source: Rod Fox, Laing+Simmons Double Bay
http://www.smh.com.au/news/national/mortgage-dreams-drift-off-the-plan/2005/11/25/1132703380778.html
THE number of properties seized and sold by lenders after mortgage defaults is on the rise after more than $60 billion has been slashed from the value of the Sydney property market since the city's house prices peaked two years ago.
As house prices continue to sag following the boom, there is evidence the number of mortgagee sales has increased. An agent at Laing+Simmons Double Bay, Rod Fox, said he had seen the number rise significantly in the past year.
"I believe we have had close to 30 mortgagee sales this year," he said. "I've got one coming up for auction in December and my colleagues have another one or two."
An agent with Richardson & Wrench in Rooty Hill, Shayne Douglas, said mortgagee sales had picked up by 10 to 20 per cent in the past six months.
"There has definitely been an increase, there's a lot more mortgagee sales now than there were two or three years ago."
The Herald used data on the number of residential properties and median house and unit prices to estimate the value of Sydney's 1.7 million dwellings. They reached about $850 billion early last year but had fallen to about $785 billion by the end of September - $60 billion-$65 billion less.
The median Sydney house price, calculated by Australian Property Monitors, has fallen by $50,000 to $520,000 since the market peak. And the median unit price is down $24,000 to $357,000. The figures were composition adjusted to balance different sectors of the market.
The most expensive 10 per cent of Sydney houses have registered a bigger proportional loss than the average. Their median price is down from $1.38 million to $1.18 million.
That fall, of $200,000 or 14.5 per cent, is much more than Australian Property Monitors' estimate for the city-wide average fall of 8.9 per cent.
"The [housing] price bracket from about $900,000 up to around $1.3 million is the bracket that has suffered the most," the monitors' research director, Louis Christopher, said.
Mr Fox said the number of mortgagee sales had risen because people had borrowed too much at the peak of the property boom and were having trouble meeting mortgage repayments.
"Look at what people paid two years ago, they paid top dollar for off-the-plan developments and now the market has come down considerably for that type of property," he said.
Most properties sold in mortgagee sales fetched much less than the owners originally paid for them, Mr Fox said. "With one of my past sales in Rose Bay, the owners paid $792,000 and it sold for $720,000."
The director of Richardson & Wrench in Bondi Junction, Andre Frack, said they had been selling a property for the owner, but halfway through "the owner wouldn't accept an offer and the bank ended up taking possession and accepting the same offer".
The number of mortgagee sales was up because people who had bought off-the-plan during the boom could not afford repayments, Mr Frack said.
The chairman of Wizard Home Loans, Mark Bouris, said the percentage of defaulted loans on its books had risen from 1.1 per cent to 1.3 per cent from mid last year to mid this year, which was not considered a "significant increase".
CITY SEIZURES
- Two bedroom terrace in Bondi Junction bought for about $850,000 two years ago sold recently for about $800,000.
- One bedroom unit in the city was bought two years ago for about $510,000. Similar properties in the same building now sell for $420,000.
Source: Rod Fox, Laing+Simmons Double Bay
