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Smurf1976

Australian Market Entering Crash?

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Refering to the Australian market, particularly Hobart where I live.

1. We had a blow off top with sales volumes around September 2003.

2. The market was starting to turn down noticeably earlier this year but then picked up again.

3. Over the past few weeks the number of houses for sale has sharply increased. The property newspaper is thicker and For Sale signs are multiplying. But the word "Sold" is noticeably scarce. More to the point, some serious price cuts are starting to happen. Only today I noticed one cut from 760K to 660K which in % terms is significant.

Most interesting of all is the trend towards moving into a new place, or building one, before the old one is sold. This has lead to many of the properties for sale being empty. Pure logic indicates that we therefore must have more houses than we actually need and there aren't enough people to fill all of them at once. Some properties must remain empty.

More to the point, it means that quite a few properties are now for sale in a circumstance where the vendor owes the bank an absolute fortune on two properties. I really don't think it is pushing it too far to say that in due course they are forced sellers. Whilst they can hang on for a while, not too many people can forever pay two large mortgages, maintenance, insurance etc. Sooner or later they have no choice but to sell.

As for timing, my thinking is that around March next year when most of these properties are unlikely to have sold is when the panic will start. There's no more excuses - like Christmas or school holidays etc - to explain why it's not selling.

Just my thoughts based on observations of the market where I live. Whilst we don't have a crash now, prices are falling a little and we are very clearly setting the market up for a lot of forced sales which is the logical trigger for a crash next year. Even a major builder is now acting as an EA (with no commission) to try and keep the practice of moving out before selling going. But when those places remain unsold the trouble will start IMO. And all this WITHOUT the RBA cranking up rates.

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Most interesting of all is the trend towards moving into a new place, or building one, before the old one is sold. This has lead to many of the properties for sale being empty. Pure logic indicates that we therefore must have more houses than we actually need and there aren't enough people to fill all of them at once. Some properties must remain empty.

More to the point, it means that quite a few properties are now for sale in a circumstance where the vendor owes the bank an absolute fortune on two properties. I really don't think it is pushing it too far to say that in due course they are forced sellers. Whilst they can hang on for a while, not too many people can forever pay two large mortgages, maintenance, insurance etc. Sooner or later they have no choice but to sell.

This happened to my oldies. 2 x mortages. They had to settle for less than they were happy with just to get the monkey off their back .... that and each passing month ate into their "wealth" :rolleyes:

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With the 2x mortgages, I assume then its a bridging loan. What are the normal terms on these? Suely there is going to be a break point (6/12months) where they roll up in penalties or increased rates.

There not really used in the UK, much more expensive and higher interest rates. So you end up with these long chains of buyers waiting on someone higher or lower up the chain either trying to sell or haggle over a few quids worth of repairs.

Just heard of one yesterday that entered the chain in apr and still waiting to complete. Not sure how many in the chain but it in this case its someone at the top haggling over price and dragging the process out.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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