News.com Australia: New homeowners lose the worst when house prices fall
Sydney Today, in just three months on March 3, Australian Eastern Time, the number of properties in Victoria whose property value was lower than their purchase price soared to nearly 21. In some of the most serious areas in the northwest and southeast of the state, about one in ten properties are in negative equity.
RP Data's research report shows that in the December quarterly report, the number of property values below the purchase price rose from 2.4% to 3.8%. There are now 50705 properties that are so-called negative "baseline" assets. Tim Lawless, head of research at RP Data, everyone who bought a house after the highest price in the Melbourne real estate market-October 2010-has had a reduced book value. If they sell before expectation, there will be no such problem.
Mr Lawless said: "This is a very bad situation. You will realize that negative equity means that you may owe the bank more money than you have. This is indeed very unfortunate." Property in the Mallee area of Victoria The number of values lower than the purchase price reached the highest, with 14.2% of properties in negative equity. In Ovens-Murray, 10.6% of properties are in negative equity. The situation in Melbourne is slightly better, with only 3.5%, and owners who hold properties for less than five years have lost the most.
The minutes of the Reserve Bank's March meeting pointed out that they are satisfied with the current economic growth rate, so people expect interest rates to remain stable this year. Some economists expect interest rates to fall by 5 basis points in May, or about 25%, because unemployment is currently rising. However, the minutes of the meeting released yesterday showed that the central bank believes that the current level of interest rates is conducive to balancing the squeeze caused by the prosperity of Australia's mining industry on the manufacturing and retail industries.
CommSec chief economist Craig James believes that the minutes of the meeting show that "there is no need to rush to lower interest rates in the short term," unless the debt crisis in Europe worsens or the demand in the Chinese market drops significantly. (Ivy)