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Time to raise the rents.

Property Investors Hit Hard

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Not the UK I'm afraid.....

You can look forward to stories like these a few years after the Olympics.

http://www.smh.com.au/news/national/proper...6335933244.html

A GROWING band of Sydney home owners who bought near the peak of the property boom in late 2003 are facing negative equity as property prices sag.

Negative equity occurs when the price of a house falls far enough to wipe out the value of the home owner's deposit. If the house is sold, the borrower would still owe the lender money.

The Reserve Bank published figures yesterday showing Sydney house prices fell 1.1 per cent on average in the March quarter. Prices have now fallen 9.6 per cent on average since property prices turned, slashing the city's median home value from $570,000 to $516,000.

Louis Christopher, of Australian Property Monitors, a subsidiary of John Fairfax Holdings, which provides figures for the Reserve Bank, said more and more Sydney property owners were falling into the red.

"For those who bought in late 2003 and put down a 10 per cent deposit, if they were to sell today, on average, you would be in the red after you take into account transaction costs," he said. "There are more and more of these people out there."

A Macquarie Bank economist, Rory Robertson, said the scale of house price falls in Sydney was likely to affect highly geared investors who bought at the peak of the property boom more than owner occupiers planning to live in their home long-term.

"It's certainly a big issue for property speculators who bought in 2003," Mr Robertson said.

Mr Christopher said this week's Reserve Bank interest rate rise could drive Sydney prices down another 5 per cent by the end of the year, leaving many more families with negative equity.

The Commonwealth, Westpac, ANZ and St George banks yesterday joined the National Australia Bank in announcing they would pass on in full the Reserve Bank's quarter of a percentage point interest rate increase.

However, the Reserve Bank signalled in its quarterly economic report yesterday that interest rates would remain on hold for now. The dampening effect of this week's interest rate rise would keep the underlying rate of inflation at an acceptable level, it said. This suggests rates will remain unchanged unless unexpected inflationary pressures emerge.

However, the Reserve Bank said the official inflation rate "can be expected to be noticeably higher" in future because of soaring fuel prices.

The Prime Minister, John Howard, admitted yesterday that prices for basics like bread, milk and fuel would rise. "Some increases in prices are unavoidable; high petrol prices are inflationary," he told Melbourne radio. "I am very conscious that people are forking out a hell of a lot more for petrol now than they have been at any time in their lives."

The Reserve Bank report said home borrowers were taking advantage of competition in the lending market in an effort to limit monthly repayments.

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I guess you haven't been watching the news since 2004 then.

How's your old place going anyway?

I have I just don't believe a word of it anymore.

Well of course as soon as I say "it's been on the market over a month and it hasn't sold" it'll sell the next day. But so far so good, still sat there. Would you pay £335k for a house without a shower, parking space or garden ?

Edited by terrified

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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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