If you've been paying attention you know that the global economy has been in a slump for the past few years, and Australia hasn't escaped unscathed. Though the recovery is coming along, many people are still struggling to adapt. It seems too many are buying properties with the old economy in mind, and in the process making poor financial decisions. There are many economic pitfalls to buying a property, but a quality property coach can help buyers avoid most of them.
The Current State
Just one year ago repossesion orders were down, with 614 writs of possession issued in the final quarter of 2011 in New South Wales, down from both 2010 and 2009 (Property Observer). However, less than 6 months later in March 2012, the total number of repossessions orders filed had ballooned to 2955, on track to hit a record 3940 by the end of the 2011-2012 financial calendar in July (Sydney Morning Herald). Copy of my latest article
Home owners are actually struggling now more than they were at the height of the Global Financial Crisis. Many find they can't meet their mortgage repayments, and the end result, of course, is a forced home sale.
<moderator: delete advertising>
The first six months of the 2012 calendar year were particularly rough for Australian homeowners, but that doesn't have to be repeated this year. More and more properties are getting foreclosed upon because not enough people utilised all the resources available to them during the buying process. If more people had taken the time to meet with a trained property coach before they committed to buying, there would undoubtedly be fewer foreclosures today, and fewer tomorrow as well.
I have a friend who repossess property for the banks and he is saying that a lot of the lenders are giving much more breathing space to people defaulting now because they are worried about repossessing too many properties at once.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Its not really property investors who are facing foreclosure though typically its first home buyers and low – middle income earners who are most at risk?
http://www.brokernews.com.au/article/foreclosures-to-dramatically-increase-143913.aspx
Not likely
I too know someone who buys huge numbers of properties from the lenders in bulk lots. These are usually apartments, flats and townhouses, usually the domain of the investor.
They are extremely worried re taking possession in certain areas as all this will reduce values and affect there non problem loans. Interesting times re values in the next 6 months I would imagine.
I am sure they would love to realise these bad debts to get their cash reserves up so they use that cash to re lend at their 9 to 1 ratio This would give them ample funds to start lowering lending criteria to get money flowing again, What are your thoughts on which way it will go?
Hi Guys,
I have to agree with Terry, Banks are providing breathing space for allot of people at the moment. But is it really just first home buyers or the times we live in?
For the last 20 years people /business have always faced these challenges, I think the numbers might look “bad” but in reality our population has also increased over the last 20 years as well.
The issue we have in today’s world, is people have too much bad debt, car loans, Holiday loans, furniture loans, I pad phones.
A relative of mine said to me two months ago that the place he was working at was closing down in three months time, two weeks later he takes out a 80K loan to by a mustang.
He still has not found a job yet…. Are people just silly?
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Jpcashflow wrote:…. Are people just silly?It appears so JP. I don't under rate the value of coaches in any sphere of life but that's not where I see the problem. A significant ramping up of defaults isn't a sign people need more coaching services. It suggest employment dynamics are changing faster than people can adapt and that budgeting and debt management services would be far more useful.
Then there's those people no amount of help will encourage them to make sensible choices and decisions.
Nothing ever really changes back in 1990 I worked for a property developer. When talking to the banks as we did on a regular basis they told me that if they had to call in all the loans that were behind some areas would have had 30% of the properties foreclosed.
But the real numbers will never be known because unlike the United States most properties that are in trouble in Australia are sold through real estate agents so the average person would not know.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Nigel, it would be interesting to compare the 90's figure with now
You must be logged in to reply to this topic. If you don't have an account, you can register here.
