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" Has The Australian House Price Crash Started?"

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Getting a bit bear shaped lately? :)


Has the Australian house price crash started?
By Laurie Osborne, Editor
Published 23rd Aug 2006, (a Wednesday) at 11:00AM
Rising interest rates across the world are starting to have a more painful impact on global housing markets, reads a MoneyWeek article published on Wednesday.
In the US yesterday, the country’s largest luxury house builder, Toll Brothers, reported that its third quarter profits fall 19% - the first decline in four years. The group also slashed forecasts for fourth-quarter earnings - unsurprising, as the number of unsold new family homes in the US is currently at an all-time high.
On Bloomberg, the headline was “Toll Brothers profit slumps as US housing boom ends.”
And in Australia, recent news from the property market has been even worse - there‘s now talk of a crash.…
“Housing crash puts sellers in debt crisis,” declares an article from Monday’s Sydney Morning Herald, kindly sent in by a reader..../
Of course, over here much of the population still believes house prices only ever go up. And in sharp contrast to Toll Brothers, the UK’s biggest house builder by value was upbeat in its assessment of conditions. FTSE 100 group Persimmon said that “The Bank of England’s recent decision to implement a quarter-point rise in interest rate, effectively reversing last August’s cut, has had no tangible effect on our business or visitor levels or enquiries.”
Gosh. A full three weeks since the rate rise and the housing market hasn’t collapsed yet. I guess everything’s going to be OK then.

IMF were right. We should be joining OZ and the US as winter sets in. :o

Edited by Realistbear

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This is the bit I like best...

"Housing crash puts sellers in debt crisis," declares an article from Monday's Sydney Morning Herald, kindly sent in by a reader.

The story opens with the news that a three bedroom house in Sydney sold for $260,000 at the weekend, 42% less than it was bought for in 2003, "a further sign of the depressed state of the Sydney property market."

The sale came "after the owners could not meet the interest payments on the $405,000 they borrowed to buy the house at the peak of the market."

42% off! Imagine that :D

Edited by Bingley Bloke

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This is the bit I like best...

42% off! Imagine that :D

It was a mortgagee sale and only one person turned up at the bidding. It was definetly a shock in Sydney, made front page news and aslo on the SMH (Sydney Morning Herald Web site SMH.com.au). What really pushed the prices up wasn't the 1st time buyers in the early 2000s but the mob of real estate investors. These were competing with the 1st time buyers. In effect the investors surpassed the 1st time buyers and people were falling all over themselves putting ridiculous bids in at auctions. The story goes during a boom evryone believes their house is worth what the latest auction bid goes for as long as its higher. Now the reverse has taken place no one is turning up for auctions which then normally would get passed in, but the new flood of mortgagee sales are starting where the bank doesn't care what it sells for. Amazingly we are not in a recession and the rot has started to set in. Basically people who bought in late overbought and are overstretched. There is now no urgency to buy, fear has set in and the bargain hunting has started. Basically people forget a house is only worth what people pay for it, and here in Australia valuations are worked out on the last 3 house sold in a similar area in the last 6 months.

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