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AvoidDebt

Wealthy feel pinch of housing costs as one in four Australians face mortgage stress

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And how did they exactly expect this to end? 

 

The survey, which analyses real cash flows against mortgage repayments, finds more than 767,000 households or 23.4% are now in mortgage stress, which means they have little or no spare cash after covering costs.

This includes 32,000 that are in severe stress, meaning they cannot cover repayments from current income.

The firm predicts that almost 52,000 households will probably default on mortgages over the next year. 

“If we start seeing house prices slipping then this can turn into a US 2007 scenario rather quickly,” he said.

https://www.theguardian.com/australia-news/2017/may/03/wealthy-feel-pinch-of-housing-costs-as-one-in-four-australians-face-mortgage-stress

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31 minutes ago, AvoidDebt said:

And how did they exactly expect this to end? 

 

The survey, which analyses real cash flows against mortgage repayments, finds more than 767,000 households or 23.4% are now in mortgage stress, which means they have little or no spare cash after covering costs.

This includes 32,000 that are in severe stress, meaning they cannot cover repayments from current income.

The firm predicts that almost 52,000 households will probably default on mortgages over the next year. 

“If we start seeing house prices slipping then this can turn into a US 2007 scenario rather quickly,” he said.

https://www.theguardian.com/australia-news/2017/may/03/wealthy-feel-pinch-of-housing-costs-as-one-in-four-australians-face-mortgage-stress

But what about the housing shortage:

https://www.businessinsider.com.au/charts-australias-significant-housing-shortgage-2016-3

It's always a housing shortage. 

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Interestingly this analysis provides a breakdown at suburb level. Is there anything comparable for the London market eg. the number of people in financial distress or probable defaults for say Hackney. Or would that be a pointless exercise at 100% :)

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“This idea of the Australian dream is gone-ski, unless you’ve got $1.2m to $1.6m in [central] Sydney, or your parents have got money and they can back you,” he says.

In 2006 Walker was just $150,000 away from paying off the mortgage on her acreage home south of Brisbane, which was valued at $1m two years later.

Now, after a tangled web of loans from banks who were willing to lend $2m for her to branch out with investment properties – despite her being in a commission-only job that she then lost – Walker, 64 and nearing retirement, is effectively $500,000 in debt.

“I’m holding back the tears. I had a really bad breakdown and was suicidal and under a lot of doctor’s watches for about three years. I’ve been trying to survive enough to gain something back.”

Walker has won concessions from one bank and is fighting for more from another.

The result could be Spain-like overnight property value crashes of 40% to 50%, Robinson says.

https://www.theguardian.com/australia-news/2017/may/03/eye-watering-prices-australias-housing-affordability-crisis-laid-bare

 

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