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Duplex

Down Down Under

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Australia is this what we can expect; the Australian market seems to be 6-12 months ahead of the UK and US.

Arrears are heading towards their highest level in eight years as household debt levels soar

While borrowers are feeling the squeeze, almost all the increases in bad debts stem from credit cards and unsecured personal loans, traditionally the first areas of lending to show signs of trouble when the economy begins to contract.

Principal of the Main Beach First National Real Estate Jamie Burke said the number of mortgagee repossession sales were higher than ever now.

"I deadset have not seen a mortgagee sale for two or three years, now there are six to seven each week," said Mr Burke, who has 20 years experience in the real estate industry.

It is not necessarily high-end properties but high-end people who end up with resposessions.

"The people you would think who have dinner every night at flash restaurants and drive big expensive cars are the people who seem to have overcommitted.

Financial Counsellors of Queensland president Gregory Mowle said many families were now at breaking point.

"People are being pushed to the edge of the cliff. Previously the banks would be happy to keep giving people credit or do consolidation loans but they are reining in credit now and people can't keep on borrowing," he said.

Not so soft landing

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I think it means that banks are squeezing credit as they always do at the tail end of a speculative bubble, leaving the market hanging in mid air. The US market is on the edge, foreclosures are on the rise and inventories are at record levels, Boston/New England seems to be leading the way followed by Southern California, Florida and Nevada.

Can the UK market isolate itself from the impact of a global bubble burst? No

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As I've said and will say again, the UK's high yields are the factor that seperates us from most of the world (or at least the UK's economic peers).

When the UK has a few more years of HPI, or stagnation & another boom cycle, then we'll be looking at the same degree of problems as these other countries are facing now.

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Australia is this what we can expect; the Australian market seems to be 6-12 months ahead of the UK and US.

Not so soft landing

Thanks Duplex, I have read a few of your posts on Australia and find them really interesting, please keep them coming!

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  • 302 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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