Monday, May 7, 2012

Perth's Next Property Victims

See article below published in the Australian 2nd May 2012

"We have the house we can't afford"

Is this what is sustaining the Perth property market? 
Mum & Dad investors struggling to hold on to their investment property.
Unsuccessfully attempting  to sell  as they struggle with mortgage payments & CPI increases.
Fingers crossed interest rate cuts will offer some relief or salvation.

If ever anyone needs a sign that now is the time to get out surely this couple is it.

Don't think they are unique there are thousands of investors just like them desperate to offload dud property investments unable to find a "Greater Fool:" to offload it on to. 

Just don't be the fool to catch that falling knife.

Waking at 4am & getting home & 6pm "Living the Ozzie Dream"

Struggling to pay electricity bills & buy kids clothing, this couple are about to get this years Property Insurance ,Shire & Water rates for 2 properties which will amount to around $8,000. Where are they going to find this?

Forced to return to work "Early" after the birth of their second child just to make the mortgage payments.
Yet they show they have their heads in the sand by saying "I wouldn't say we are living week - week"

Now when you read the article below keep in mind this couple has a $480,000 mortgage against their Tapping Property.

They built this house on a $250K block so lets say at the time of their mortgage it was valued at $530K (10% Deposit)

In the Lord's street in Tapping a number of houses have sold recently so we can get a gauge of values in their street. Note I have only selected the 4 x 2 homes on same size block etc to make a fair comparison.

#5 first sold in Oct 2007 for $482K it then sold again Nov 2011 for $490,000

#7 Tried to sell for six months but was taken off the market after they could not get $445,000

#10 First listed for sale at $495K June 2010 it stayed on the market for 15 months before selling in Aug 2011 for $470,000

#14 First listed @ $520K March 2011 before sells @ $440,000 October 2011

What the Lord's don't realise is that they are trapped paying off a loan of $480,000 on a house that is worth around $450,000 (FYI #14 is opposite their home & sold for $440k Oct 2011)