SA and WA lead the way - Negative Equity

I did just recently, but hey you don't need to believe the facts / data

 

Good for you....care to share?? Address

 

Didn't think it was that long ago that banks would allow investors to borrow 100%.
They were even so kind to allow you to also throw in the stamp duty and settlement fees.
Oh the good ole days when banks were throwing themselves at investors.
No shortage of homeowners that probably also funded holidays and new cars through their loan.

 

The good old days for me was when we had no doc and low doc loans and my mortgage broker told me what my salary was

 

Ditto, ppor went up 130k

 

According to their survey methods they've broken up the country into sampling areas based on population size, so I wouldn't expect towns to have such a large impact:

http://www.roymorgan.com/~/media/fi...an-single-source-australia-september-2017.pdf

 

Chart also only represents 12 month period
Should be looking at a 10 year period imo

I dont believe its rocket science .... when markets rise so does your capital/equity, reverse happens when markets fall. However on a micro level it will be very much dependent on asset/product/location

 

Can't post addresses as breaching of clients details... but just about every single repeat customer of mine has had equity increase.

Modbury/s, Ingle Farm, Wynn Vale, Hope Valley, Highbury, Athelstone, Golden Grove, Clearview, Valley View, Holden Hill, Redwood Park, Tea Tree Gully, Dernancourt, St Agnes, Ridgehaven, Vale Park, Surrey Downs, Para Hills, Fairview Park, Rostrevor, Hectorville.

I don't recall of a single client who has had negative equity.

 

Brilliant.... thanks for sharing, and perhaps an indication on where to buy in SA????
How we move forward will be the real clincher as credit squeeze has and will most certainly impact all markets. Its dependent on whether investors can source finance, and those that must off load and how much more stock comes to market.... time will tell.


But we would be foolish to believe that the current financial playing ground wont impact on all markets, what we are seeing today. I don't expect growth from just buy and holds, investors will need to add value somehow

 

very good thought true from you
and not one sided talk from the other guys here in the forum

 

I think the time has long gone for just buy and holds, pretty sure most would look for some sort of add value potential (development/reno etc)
Will limited access to funds can't see why anyone would go down simple buy and hold, unless undervalued purchase.

 

Hi MTR,

My PPRO in Glenelg North 11km Nth West of Adelaide CBD (760m sq with a 1950's red brick 3 bed 1 bath on it) I had a bank valuation done -walk through (not desk top) in early 2017: $480,000. Then repeated a bank valuation (again walk through) just recently to extract equity for more investing: $540,000. Absolutely not a single improvement was made to this property in the past 2 years as we plan to demolish it in a few years. So this is pure capital growth of 12.5% in 2 years.

BUT, I have 2 investment properties in Morphett Vale 25km Sth of the CBD, that I had a walk through valuation done on 5 yrs ago and again in Oct of 2018 and both valuations came back exactly the same as 5 yrs ago, so going backwards in real terms because not keeping up with inflation.

This is a real life example of the different markets within the Adelaide Metropolitan area. Properties within 15km of Adelaide CBD will have had varying amounts of capital growth. Further out 15- 30km from the CBD will have had no or negative capital growth. However properties located more than 15km from the CBD, in some cases (not all) provide cash flow positive investment. For example my 2 IP's in Morphett Vale the rent return is 7.5%.

 

Thanks for sharing, interesting, its the product and the location as to what you will achieve in terms of growth.

Its a fragmented market?

I recently had my house bank valued in Perth inner city and came back $200K more than last valuation. Bit shocked really.
However, it most certainly going backwards in the burbs..

 

Combination, if you bought pretty much <15km with CBD >600sqm okay property you would likely have seen growth.

 

No, adelaide only ever goes down! Soon it will be zero!

 

I am in the burbs and have definitely taken a hit, but luckily we pour all of our money onto the mortgage. The biggest danger is the large % of people who partake in minimum repayments or interest only.

I am 31, as are my friends, and I would say more than half of them do minimum repayments based on conversations. Factor in we all bought in around 2012 and a lot would be stuck.

 

Right, this explains the chart

 

OK so is this saying prices in Qld are now growing?

 

In my view it still doesn't explain the chart for SA.

Yes, inner suburbs in Adelaide have grown faster than the outer suburbs over the past 6 years.

Yes, some property in 2017-2018 is only worth around the same or in some cases even slightly less than the peak prices around 9-10 years ago (I bought a property in 2017 below it's 2009 sale price).

However, the chart suggests that an additional 4.5% of the entire SA mortgage holder collective went into negative equity (or loan = current value) DURING the 12 months between their two measurements (2017 to 2018). This would suggest that there had to be a lot of areas over 2017-2018 which had falling prices (and by quite a significant amount if it was to put the value of the property below the value of the owner's loan). I haven't seen it. I have seen stagnation in growth, but prices falling enough to result in negative equity for that number of mortgage holders? Show me the data!

 

If you think its wrong then Perhaps take the chart with a grain of salt? Or better still provide evidence to support your views so we can all learn

What its saying is that over a 12 month period all States bar Qld have higher negative equity. Sign of the times