Many people have bought investment properties (I was until 2004) which is exactly what drove the property boom in SE Qld...people buying investment properties and retirement homes with the increased equity in their primary residences in Sydney and Melbourne.
This only works if you have tenants. Rents have skyrocketed in the last 12 months suggesting a shortage of rental properties. Even here in Sydney!
I guess this was because of the increase in property values, and subsequent low rental yields forcing investors out. Is this not the market correcting itself?
Assuming the doomsday scenario of the banks calling in their dosh, where are these tenants going to live? Your not suggesting they will all become owners at the new low prices?
A house is only worth what someone else will pay for it and at the moment foreclosure auctions are seeing 50% of what that house was thought to be worth a short time before. This is happening Australia wide in parts of every major city.
I have been looking at upgrading myself. I live in mortgage belt outer suburbs Sydney. Can't find any bargains. Granted prices have reduced slightly, but certainly no bargains. And it's been like this for a couple of years. Went to a foreclosure auction myself last Saturday. Yes, only a couple of bidders, probably not serious anyway, and the highest bid was $150k UNDER the banks vendor bid. Passed in. The bank obviously thought it could negotiate a higher price because they didn't sell. So they haven't panicked yet. CC..should I wait, and how long should I wait to pick up one of these 80% off bargains?
Unlike Americans who 'invest' in the stock market (predominately) Australians predominately 'invest' in real estate. That is why our real estate is so much less affordable than US real estate...average house 7 times average wages rather than 3+.
I thought it was houses that got them in the poo?
I'm more worried about our leaders finding something for us to do other than dig stuff out of the ground. But then again, we want more than $50 a week in pay, don't we!