Financial Review: Housing prices have shrunk, mortgage purchases fall into negative equity
Sydney Today, March 3, Australia Eastern Time According to RP Data, about one-seventh of the Australian properties purchased in the past five years have shrunk. This puts many property owners in negative equity; that is, they owe the bank more money than the current price of their house. In addition, 21% of Australian owners’ houses are now worth twice the original purchase price, a little lower than the 5% in September.
The data provider of the 2011 December Quarter Equity Report found that the appreciation of assets has fallen in the past five years, and the value of assets has fallen more recently, making the number of properties purchased during this period whose value is lower than their purchase price reached 15.8%. The report also shows that at the end of December, 12% of all landlords in Australia had house prices lower than the purchase price, higher than 6.4% at the end of September.
RP Data’s research and analysis expert Cameron Kusher said: “Among all the property owners with negative equity, three-quarters of the houses were purchased within the past five years. This reflects the long-term nature of the real estate market and investment. Just bought a property. The last few years are often the most difficult times because you don’t have a lot of assets in your hands and you haven’t paid off the principal of the loan."
The most likely to fall into the quagmire of negative equity should be Queensland. 11.7% of properties there are worth less than their purchase price. , Followed by Western Australia with 8.5%. Since 2008, the real estate market in these two states has been at the lowest level. The northernmost part of Queensland can be said to be a "severe disaster area", where the owner's real estate may become negative equity as high as 22.6%. In the southern region, 19.4% of Gold Coast and 15.3% of Sunshine Coast owners owed more loans than their current house prices. House prices are twice the ratio of the purchase price, the highest in Victoria, where half of the houses are in this situation.
The current analysis does not pay attention to the owner's debt situation, only analyzes the price when they bought the house and the current valuation value. RP Data's report shows that since late 2010, the value of urban real estate has shrunk by 5.5%. Mr Kusher said: "Especially in the current period of falling house prices, you will be worse in the first few years of buying a house." (Ivy)