Mortgage Stress

June 1st, 2008 By Scott Savage Categories: Australia

How much of your income goes to pay the mortgage?
It is not hard to find doomsday predictions for the Real Estate market. Sites such as Who Crashed the Economy are a collation of tales of pending economic (and particularly housing sector) destruction. There is a trend that indicates mortgage stress and housing price falls are limited to the outer suburbs of Sydney, primarily the west and south-west. Even when you analyse mortgage stress on a nationwide basis these suburbs keep appearing.

So I guess the question is whether this effect will be seen in the more blue label, inner-city suburbs. Most experts seem to think that the next 9 months or so are a good time to buy; if you have some savings tucked away and can ride out high interest rates in the short term. The next official inflation reading comes out on July 23, so a change in rates after this time is entirely possible. Whether the increases end there, or another ones comes in November, is anyones guess. I will be watching these news stories pretty closely, as it seems most of Australia is.

I was prepared to bid at an auction on the weekend, but it sold for $100k (15%) more than the quoted price range, and $50k less than what turned out to be the vendor’s target selling price! Clearly there is still a lot of dodgy underquoting practices from certain agents and turbulent pricing changes are still shaking themselves out in this market. I just have to hang in there and hope (as evil as it is) that a foreclosure can deliver me a reasonably priced dream home.

Tags: ,
No comments yet.

Leave a Comment