Values dip as first home buyers lost
Around $220 billion is loaned to residential buyers across Australia each year, of which 15 per cent has been taken up by the first home buyer segment over the past decade, equating to about $30 billion per year.
But during the recent boost (2009), this rose to 24 per cent with the annual borrow close to $53 billion.
During 2009, there were 190,850 first home buyers across Australia but in 2010, this figure dropped dramatically to 96,200. Hence, we are now experiencing a market impacted by the absence of first home buyers.
Money Morning Australia passes on comments (? if it's a report, I haven't found it) from an RE industry guy in a state of capitulation.
Real Estate Industry Forecasts Major Price Falls
“We anticipate a reduction in the median price from $601,500 in December last year to somewhere between 3-5% below that in March.” – Enzo Raimondo, CEO, Real Estate Institute of Victoria.
It seems it’s not just the so-called lunatic fringe saying the housing bubble has burst.
. . .
Make no mistake, a 3-5% drop in the median house price is big. Especially if you’re mortgaged to the eyeballs. For some, when you take into account the fees associated with buying and selling, it can mean the difference between walking away break-even or walking away with a big loss.
And I mean big.
A 5% drop from $601,500 is a fall of $30,075.
1 comment:
Interesting tidbit: the crash of 2008 in BC showed a significant drop in the fraction of FTBs active in the market. In other words, an increased fraction of buyers either already own or are investors. If that looks like a condition where owners have to carry multiple properties at once, well, you'd be right.
Australia should look up the meanings of "bridge" and "pier" loans.
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