Adelaide houses down 2.5% in June
Aug 2nd 2012, 7:30 am
#16
Joined on April fools day
Joined: Apr 2012
Location: 30 miles from a decent grocery store.
Posts: 10,642
Re: Adelaide houses down 2.5% in June
In my opinion (and I could be wrong 
) the US is a special case because of the way that the home loans work there.
As I understand it, a homeowner can simply stop making repayments to the bank and the bank will "foreclose" with no further recourse on the homeowner, even if the sale of the foreclosed property doesn't recover enough to repay the loan.
When the above starts to become a common occurrence, then supply increases massively and prices plummet. To the point where many houses are priced well under their "value".
In Australia (and most other countries, I think) if you stop making repayments, the bank will repossess the home and sell it, and come after you for the $$$ if the sale doesn't pay off the loan. Prices are far less volatile as a result.
You will notice lots of words like "I think", "I believe" and "as I understand it" in the above paragraphs. Some cynical readers may think that's because I don't really know what I'm talking about... They might be right, ha ha.
) the US is a special case because of the way that the home loans work there. As I understand it, a homeowner can simply stop making repayments to the bank and the bank will "foreclose" with no further recourse on the homeowner, even if the sale of the foreclosed property doesn't recover enough to repay the loan.
When the above starts to become a common occurrence, then supply increases massively and prices plummet. To the point where many houses are priced well under their "value".
In Australia (and most other countries, I think) if you stop making repayments, the bank will repossess the home and sell it, and come after you for the $$$ if the sale doesn't pay off the loan. Prices are far less volatile as a result.
You will notice lots of words like "I think", "I believe" and "as I understand it" in the above paragraphs. Some cynical readers may think that's because I don't really know what I'm talking about...
They might be right, ha ha.One other factor (among others) was during the run up in prices new homes were being built faster than the market could absorb them. Info only, it would seem that after many years (5 to 8 depending on location) prices have finally hit bottom and are slowly beginning to creep up. Now if the Eurozone doesn't go tits up...
Aug 2nd 2012, 9:47 am
#17
Lost in BE Cyberspace
Joined: Dec 2008
Posts: 6,039
Re: Adelaide houses down 2.5% in June
I also question the link because there are so many other factors like total collapse of buyer demand, equity release binges, wage freezes, stagnancy of real wages, massive inflation in other markets, all of which can put downward pressure on housing stock without a single redundancy.
Aus houses are now amongst the least affordable in the world and the only way is down. Look at the global economy - look at the EU, look at China. To think Aus houses can continue to climb is really mad.
Aus houses are now amongst the least affordable in the world and the only way is down. Look at the global economy - look at the EU, look at China. To think Aus houses can continue to climb is really mad.
Aug 2nd 2012, 10:15 am
#18
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Thread Starter
Joined: Jul 2012
Posts: 3,300
Re: Adelaide houses down 2.5% in June
"Continue to climb" ? Prices have been slowly easing for almost 2 years now in Brisbane with wages increasing...that process could just continue for x years like it has in previous times so no saying which way it will happen. First home buyers I know are still getting on the ladder just starting more modestly.
Aug 2nd 2012, 10:26 am
#19
Lost in BE Cyberspace
Joined: Dec 2008
Posts: 6,039
Re: Adelaide houses down 2.5% in June
I don't many who think that but always a few I guess. Not a big believer in the other extreme either that it must crash rather than deflate/stagnate for a while...many things could happen and people who hang their hat on one are usually being dogmatic.
