Australian Housing Affordability Discussion

[whatmeworry]

Those dunny in room places are called studio apartments, aren't they? Granted, they usually have a more substantial partition but I've seen curtains and sliding panels too.

They also look a lot like a room in The Pod Hotel in NYC.

Weirdly the the two homes shown are luxury apartments.

 

[cove]

Just received and read a UBS report on mortgage loans in Australia. They now estimate that there are many,many loan applicants lying on their loan applications. It seems that there are $500 billion of these "liar loans" on home purchases.

 

[RAM]

Just received and read a UBS report on mortgage loans in Australia. They now estimate that there are many,many loan applicants lying on their loan applications. It seems that there are $500 billion of these "liar loans" on home purchases.

Going back a few years - after finishing a presentation about how this bank's Super was invested with us I did my normal trick of asking the client some questions.

Oddly enough, one of my perennial favourites has been, the ability of mortgage holders to cope with a 2% increase in mortgage rates.

For those on the wrong side of 39.9999 - 2% rises are a common memory.

The response quite surprisingly, in absolute detail that was shocking. They'd conducted stress testing but they were clearly concerned so their testing went way beyond anything I've come across past or since. They contacted a large number of their mortgage holders directly and offered a discounted rate if they agreed to participate in exceptionally detailed interviews. Thinking about it I suspect part of the agreement included letting them off if they had not been 100% honest in their initial loan application.

Result was that the bank would be wiped out if 2% rise came through - likely default rate rose by a large factor. Failing memory on what it was.

Shocking - conversation went along these lines - "It is not just us that would be wiped out, every bank would go, so at the margin we're taking some action - overall we need to maintain market share or see our price plummet. The Govt won;t let this happen."

Immigration anyone?

 

[whatmeworry]

Just received and read a UBS report on mortgage loans in Australia. They now estimate that there are many,many loan applicants lying on their loan applications. It seems that there are $500 billion of these "liar loans" on home purchases.

I have heard of mortgage brokers that will fake your employment status and your actual salary.

When the first home buyers grant first came out, one broker I knew of, would falsify records for people on the dole, who would purchase a property and then later flip the property to cash in on the first home buyers grant. This broker later went to jail for numerous white collar crimes.

 

[cove]

Perth real estate prices are now back down to 2012 levels.

 

[Hvr]

Perth real estate prices are now back down to 2012 levels.

I wonder how many people are in financial distress paying their current mortgage? And if they have to sell can they cope with a loss if they purchased recently?

 

[cove]

There would be some who have negative equity now around Perth. Low interest rates have slowed the need of many to sell but that will change some time next year (probably).

 

[Denali]

Back in May, houses in my area were signing contracts within 4-5 days of listing (we listed at 6pm and had offers the next day) but I noticed 2 houses that I drive by daily did not sell and the for sale sign have been removed from one and a new agent on the other.

Im just a pleb but Im definitely getting a slow down vibe. Winter or people just fed up and taking a break from the rat wheel?

We did get a phone call from a developer about some land we have. We've gotten enquiries via mail before but we dont have a landline so no idea how he got hubbys mobile number.

 

[RAM]

Seems the clouds are gathering around the world on housing at the moment - negative reports out of the UK and potential mini-GFC in Canada with on-bank lenders.

Buyers' market on the way? UK property transactions fell again last month

 

[cove]

A real estate report said several Perth suburbs had price rises but to sell a property here you need to get the pricing correct otherwise it could sit unsold for a long time.

 

[chelzmalee]

Dunno about other areas but Central West NSW - we can't list them quick enough. Everything is selling within days, this weekend's open homes saw 5 of 6 cancelled due to them selling. It's just crazy. Same with rentals - I have a less than 2% vacancy rate at the moment. House prices aren't going through the roof but I'm waiting for it

 

[drron]

And in our little neighbourhood on the Sunshine Coast prices are up 50% in 2 years.But only a small area of the sunshine coast close to the new hospital and beach.

 

[eastwest101]

Just got my place in Townsille revalued and came backexactly tthe same as the valuation done in 2006, so market around Australia diverging in a lot of different directions.

Prices in some areas of QLD back to late 1990s early 2000 levels.

 

[cove]

There was a recent sale of a Crawley Perth apartment for $430,000 less than it previously sold for in 2006. Recent sales in Sydney would be well more than double this new price level achieved in Perth. Naturally the stamp duty collections on WA property sales must now be down in the dumpster.

 

[blackcat20]

House across the road from my old place sold for $2.45 million yesterday. Just a bog standard weatherboard on a large block, will probably be knocked down and replaced with a hideous McMansion. So overvalued it's not funny.

 

[cove]

McMansions may sound like a good idea but you end up rattling around in it once the children take off. With boys that can take a while in fact my eldest may return home for 6 months before going to Madrid to study.
We have Mrscove's mum living with us most days of the week now.
Having a large block takes a bit of work so we have help on the gardens and yard maintenance.
We have lived in our McMansion for 26 years so we have avoided all the costs of stamp duty and real estate folks.
I stuck my hand up at an auction and bought it with a single bid. Those were the days......

 

[RAM]

Seems ANZ is taking no chances (and no prisoners)...

ANZ's blacklists postcodes in Brisbane and Perth

They've added to the list as well as a few more hoops for good measure.

 

[cove]

With no substantial price drops in Sydney and Melbourne I can see how Bank Of Mum and Dad has become the fifth largest lender for first home buyers.

 

[TomVexille]

With no substantial price drops in Sydney and Melbourne I can see how Bank Of Mum and Dad has become the fifth largest lender for first home buyers.

Which creates a dangerous situation for all involved

 

[whatmeworry]

And the government will probably only guarantee the big 4, if it all goes south.