Negative equity on the rise

“4.9 per cent of all Australian homes are currently valued at less than purchase price”

LMAO! ALL Australian homes? Purchased since when? That's twice the figure assessed by the National Centre for Social and Economic Modelling (quoted from smh):
While the percentage of home owners with so-called negative equity remains tiny - about one in fifty of the 3 million households with mortgages - the number may well swell in 2012 if home prices extend their declines as some analysts expect.

Note the above - more realistically - refers to the number of mortgages, as there is a large % of Aus property that is fully owned. I doubt many of these would be in negative equity.
That said, if it's really 2% of all mortgaged households that is a high figure IMO.
 
The people in negative equity are likely to be those who have paid for LMI. If you think that this is happening, why not short QBE or Genworth? You would've made heaps.
Why not short the banks? CBA has just paid 6% for money raised on secured bonds. BHP got a few bill @ 2% and a few more @ 3%. Clearly the bond market thinks our banks are vulnerable to a housing crash.
 
The owners of my rental are in that position.

Paid close to 650k at the peak of the market. Now in financial trouble. The place next door, with better views, newer kitchen and slightly bigger just fold for 565k.

Wouldn't want to be in their shoes at the moment.
 
The owners of my rental are in that position.

Paid close to 650k at the peak of the market. Now in financial trouble. The place next door, with better views, newer kitchen and slightly bigger just fold for 565k.

Wouldn't want to be in their shoes at the moment.

but that's buying at the peak - how can you even remotely link that to "most" of australia?
 
The owners of my rental are in that position.

Paid close to 650k at the peak of the market. Now in financial trouble. The place next door, with better views, newer kitchen and slightly bigger just fold for 565k.

Wouldn't want to be in their shoes at the moment.
By the time they're out, they will be down $200k including holding costs. I have been saying for years that the risk/reward ratio of newly bought property is so unattractive it is positively ugly.
 
“4.9 per cent of all Australian homes are currently valued at less than purchase price”

LMAO! ALL Australian homes? Purchased since when? That's twice the figure assessed by the National Centre for Social and Economic Modelling (quoted from smh):


Note the above - more realistically - refers to the number of mortgages, as there is a large % of Aus property that is fully owned. I doubt many of these would be in negative equity.
That said, if it's really 2% of all mortgaged households that is a high figure IMO.

As someone pointed out earlier, there's a difference between a house being worth less than it was purchased for (the situation referenced at the beginning of the thread) and a house being worth less than the outstanding debt (the NCSEM situation).
 
Property information group RP Data said that 6.4 per cent of homes were valued at less than their purchase price in the December 2011 quarter, rising from 4.9 per cent of the market in the September quarter...

New home owners fared the worst in the report with those owning a home between one and two years, holding about 27 per cent of the total of properties in negative equity in the December quarter. By comparison, only about one per cent of owners holding their property for between nine and ten years reported negative equity on their homes.

http://www.theage.com.au/business/homes-with-negative-equity-on-the-increase-20120320-1vhe3.html
 
well dah, if the market has gone backwards, then
(a) a % of recent purchases would be valued less than in prior quarters
(b) a % of the latest home purchases on high LVR ratio's would be showing negative equity.
 
12 months ago, most people were adamant that Australia was impervious to a property downturn...... now those same people, in an attempt to rationalize reality are trying to "pigeon hole" the issue by claiming the house downturn is/will be limited to very secular parts of the market..... :rolleyes:

Well, well, well..... it seems we need another 6-12 months for some to catch up to reality and realize we have much further to go (down) in this property cycle yet. Not only that, but the world economy is speeding towards a cataclysmic train wreck in real time, right now.... some people need to wake up!

I am glad that a couple of OPs here have truly grasped reality & tried to share their insight..... but I fear it is a futile effort as many simply don't want to hear about anything that debunks their Keynesian economic fantasies....:( *sigh* ...

In terms of "negative equity" rates..... we aint seen nothing yet!
 
Talking of valuations again : )

and sometimes how the market isnt the market

Auction on the weekend for a place where a client bought a slightly above median priced house at near 300 k.

Auction was well attended and contested, the property was a little tired and was in need to a tidy up.

Well................for the 3rd time in 12 years, the banks valuer has come back with a lower val than the public auction price.

At least this time it was only 8 %.

Im not a valuer, but I reckon youd have to be brave to stand your ground on that one.

ta
rolf
 
12 months ago, most people were adamant that Australia was impervious to a property downturn...... now those same people, in an attempt to rationalize reality are trying to "pigeon hole" the issue by claiming the house downturn is/will be limited to very secular parts of the market..... :rolleyes:

Well, well, well..... it seems we need another 6-12 months for some to catch up to reality and realize we have much further to go (down) in this property cycle yet. Not only that, but the world economy is speeding towards a cataclysmic train wreck in real time, right now.... some people need to wake up!

I am glad that a couple of OPs here have truly grasped reality & tried to share their insight..... but I fear it is a futile effort as many simply don't want to hear about anything that debunks their Keynesian economic fantasies....:( *sigh* ...

In terms of "negative equity" rates..... we aint seen nothing yet!

ah but how do we turn this into investment opportunities.

The 'vampire squids' have gone over this, found it too hard, and released their findings to a select few.
If you want a 'free insight' go back over the early 1990's figures.

The information is 'out there' (as in the matrix). If up to you to figure it out.
 
Well................for the 3rd time in 12 years, the banks valuer has come back with a lower val than the public auction price.

At least this time it was only 8 %.


rolf

Who pays the bank valuer????

got some information on the grape vine that cant be discussed publicly.
But in a nut shell, the valuers are being instructed by the banks, make sure your valuation is ****** conservative, we are footing the bill, so you will do what we tell you.
 
Who pays the bank valuer????

got some information on the grape vine that cant be discussed publicly.
But in a nut shell, the valuers are being instructed by the banks, make sure your valuation is ****** conservative, we are footing the bill, so you will do what we tell you.

In this instance the client fronted the val

The cross lender valuer conspiracy doesnt hold up on this occasion.

I have too much factual first hand evidence that I can discuss publically that discounts such idealogy. Up to 15 % variations on vals on the same property in the same week, the most recent gap being 200 k on a base of 1465 k.

In addition I have a few valuers as friends and business associated that dont belong to the "secret society".

ta
rolf
 
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