AfriPulse
With investors retreating and potential buyers hesitant, the housing market is experiencing a notable decline, especially in the luxury segment. This has led to a significant drop in property values in recent weeks.
“Depending on the suburb, we might be looking at a decrease of 5 to 10 percent,” auctioneer Jason Keen shared with 9News.
This rapid decline has particularly affected first-time home buyers, who often carry substantial mortgage debt, leaving them in a precarious state of negative equity.
READ MORE: Perth prepares for a rare storm, as powerful winds and heavy rain impact WA
Louis Christopher from SQM Research commented to 9News, “I consider it almost as dire as a financial situation can get, short of declaring bankruptcy.”
“I regard it essentially as the second-worst financial position outside of bankruptcy,” Louis Christopher from SQM Research told 9News.
Across Sydney and Melbourne, 50,000 people have used the government’s 5 per cent deposit scheme.
And that’s where experts are tipping prices to drop.
“For those who’ve bought in a falling market with the maximum leverage, it just compounds the losses,” Christopher said.
READ MORE: Retiring police officer the target of man’s car, court hears
Across Sydney and Melbourne, 50,000 thousand people from have used the government’s five per cent deposit scheme. 9News
This means, for a home bought for $1 million using the government’s 5 per cent deposit scheme, there’d be a $950,000 mortgage on the property.
If that home now drops in value by 6 per cent, it becomes worth $940,000, meaning you’re actually carrying negative equity of $10,000.
“Now these changes aren’t a level up for young Australians wanting to own a home,” Opposition Leader Angus Taylor said about Labor’s budget proposals for housing.
But Energy Minister Chris Bowen disagrees.
READ MORE: Monster fish caught off South Australia
The tip for those in a crunch is don’t panic – and, if you can, don’t sell. 9News
“There’ll be short-term fluctuations in the housing market, but you’ve got to set your policies for the medium- and long-term,” he said.
The tip for those in a crunch is don’t panic and, if you can, don’t sell.
“If there’s any way to hold on, hold on,” Keen said.
“We know that things can correct themselves.”
Source: NewsFinale | Read the Full Story…
