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In A Softer Housing Market, You Might Have To Take A Hit

A report from Bloomberg on Australia. “Signs are strengthening that Australia’s two-year property slump is over, with house prices eking out a small gain last month. Home values rose 0.1% in the combined state and territory capitals in July, CoreLogic data showed. Sydney and Melbourne, with prices rising 0.2% in each city. The housing market ‘may have found a floor in July,’ Tim Lawless, CoreLogic’s head of research said.”

From Mortgage Business. “Over the past few months, there have been suggestions that green shoots have begun to emerge in the housing market, following two years of price declines. However, according to principal of Digital Finance Analytics Martin North and investment manager of Aldo Capital Tony Locantro, housing market speculators are at risk of being ensnared in a ‘bull trap,’ claiming that recent reports of a recovery in the housing market may be premature. ‘My research suggests that around 300,000 households across Australia are potentially in risk of being mortgage prisoners,’ Mr North said.”

“Mr North claimed that concerns over building quality, brought to the fore by the Opal Tower crisis, would also weigh on demand, and in turn stunt price growth. ‘We’re finding more and more properties that have issues, he said. ‘My worry is that there’s a whole bunch of people who are sitting in properties with defects, but nobody wants to talk about them because if you start talking about them, then you basically pull the value of your property down.'”

The Sydney Morning Herald. “Building materials group Adelaide Brighton could be the canary in the coal mine, revealing the toll of damages resulting from the turndown in residential construction, and the risks such a decline may pose to employment. The company’s profit downgrade for the 2019 financial year took the market by surprise and infected other building materials companies – sending the share prices of Boral and CSR spiralling.”

“It seems that not only is the construction party over – the hangover looks to be more severe.”

From Reuters. “In a sign the property sector turmoil could extend, separate data on Thursday pointed to a slowdown in annual wage rises in new enterprise bargaining agreements (EBAs), with weakness seen across public and private sector firms. There is little cheer for real estate firms. Residential developer Ralan Group called in administrators this week, becoming the second major real estate company to collapse over the past two months.”

From ABC News. “Les Ladki thought he’d found his very own slice of paradise when he bought his house in a quiet suburb in Sydney’s north in 2001. He and his wife, Samar, bought the Forestville property for half a million dollars, taking out a $250,000 home loan.”

“But two decades later, the loan has ballooned to over $600,000 and the couple are struggling to pay it back, along with several other debts, which total more than $1 million. When Mr Ladki’s business ran into trouble, he slowly increased the mortgage from $250,000 to $609,000. Then the couple were hit by several major health problems at once: Ms Ladki was diagnosed with Parkinson’s, and doctors discovered Mr Ladki had a blockage in his heart that required surgery.”

“But now they have three months to sell the family home and pay off the other debts before the bank takes possession of the property.”

“Perth mother Barbara Finlay found herself in that situation, after buying a property with her husband in 2011. The trouble started when the couple split up. ‘I didn’t want to move out because rental prices are higher than what my mortgage was,’ she said. With interest accumulating, Ms Finlay is now $2,000 behind on her mortgage repayments, owes almost $10,000 in bills and is facing the very real prospect of losing her house.”

“JP Morgan Chief Economist Sally Auld told 7.30 a weak housing market was only adding to the problem. ‘If you are in difficulty with your mortgage, it’s very easy to exit that in a stronger housing market, because prices are going up, there is demand for property and it’s easy to sell and get rid of the debt,’ she said. ‘In a softer housing market that’s a lot more difficult to do, because you might have to take a hit on the price that you receive.'”

From Smart Property Investment. “Certainty Property director Simon Peisley said these figures are due in large part to the oversupply of apartments on the Sydney housing market, and with construction still booming in the NSW capital, the problem is unlikely to let up in the near future.”

“‘We have more cranes in the sky in Sydney at the moment than in New York and there’s a lot of stock still coming up,’ Mr Peisley said. ‘There are about 56,000 new apartments coming online in the next six months in Sydney.'”

“Mr Peisley added that economic concerns are another factor suppressing prices and demand in the rental market at the moment, due to Australia’s high levels of private debt and speculation that a recession is imminent. ‘There’s really no room for the RBA to loosen [interest rates] any more, and if people lose their jobs they won’t be able to pay their rent,’ he said. ‘All of our debt has been transferred to households in this country, so if there’s an economic shift it would have much more impact compared to other economies.'”

The Property Observer. “A Willoughby, South Australia mortgagee cottage listed six times in the past five years has had its asking price reduced again. The earliest indicate of its mortgagee status came in December 2018. Situated at 2332 Cape Willoughby Road, the holding is listed for $450,000.”

“The asking price is a $330,000 reduction on what it originally sought back in July 2015 of $780,000.”

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This Post Has 66 Comments

  1. It always goes like this:

    ‘Mr Ladki’s business ran into trouble…Ms Ladki was diagnosed with Parkinson’s, and doctors discovered Mr Ladki had a blockage in his heart that required surgery’

    And Santa didn’t come and there’s trouble at the ol’ mill!

    ‘But now they have three months to sell the family home and pay off the other debts before the bank takes possession of the property’

    1. She’s in a pickle no matter what she does. She can’t rent because she can’t afford it. She can’t pay the mortgage because she can’t afford it. She can’t sell because it appears she’s underwater. Her only hope is to short sell (if they allow that in Australia), and rent somewhere cheaper to pay off that debt.

      I wonder if Australia has the equivalent of an Oil City Plan. Are there any places there with cheap housing and wal-mart jobs?

      1. “She’s in a pickle no matter what she does.”

        FWIW, what she really needs is a pickle…to help pay the bills.

      2. The trouble started when the couple…

        When they went into debt thinking the house would make them rich. Only the husband got out alive. Somebody like davey was probably telling her that if she thinks she can make the payments, go for it.

  3. ‘The earliest indicate of its mortgagee status came in December 2018’

    Mortgagee is Australian for foreclosure.

  4. “JP Morgan Chief Economist Sally Auld told 7.30 a weak housing market was only adding to the problem. ‘If you are in difficulty with your mortgage, it’s very easy to exit that in a stronger housing market, because prices are going up, there is demand for property and it’s easy to sell and get rid of the debt,’ she said. ‘In a softer housing market that’s a lot more difficult to do, because you might have to take a hit on the price that you receive.’”

    Funny how that works….I’m sure the stress test take that into account

    1. How much do they pay the chief economist for that basic comment?
      Simpleton Young has met her match.

  6. With interest accumulating, Ms Finlay is now $2,000 behind on her mortgage repayments, owes almost $10,000 in bills and is facing the very real prospect of losing her house.”

    Yes, Ms. Finlay, but now that you’re single – and 70% of divorces are initiated by the wife – you’ve got a better shot at having a guy come along who checks all the boxes AND who will leap at the opportunity to provide financial security and cater to your every whim. Oh, and if you turn fickle and decide he’s not doing it for you, you can help yourself to half his net worth if things don’t work out. Surely this Mr. Right will be coming along any day now, because you are entitled to nothing less. Just keep telling yourself that, and don’t settle…you go, girl!

    2. “Surely this Mr. Right will be coming along any day now, because you are entitled to nothing less. Just keep telling yourself that, and don’t settle…you go, girl!”

      And don’t give one microsecond of thought to that biological clock that (deep down) you KNOW is surely ticking away as you and your oh-so-ever-desireable body approach the expiration date of your sexual attractiveness.

      (tick tick tick)

    3. Don’t get me started on the divorce industrial complex…

      Looking back, I came to realize just how much abuse I took from my ex-wife when I was married to her. One thing that really stands out is her belief that everyone around her should be supplying her with infinite amounts of money. I expect there to be shenanigans from her once child support stops in 2022.

      There was a thread on reddit today in legaladvice where some guy’s ex.. whom he divorced 19 YEARS earlier, had apparently just divorced her second or third husband and was hurting for money. She was drunk-texting (I hope it was drunk influenced) him at 2am threatening him with making bogus accusations in an attempt to extort money. I’ll transcribe the excerpt from texts they shared here:

      I really need you to step up and make up for what you did to me NOW.

      I could have gotten you in so much trouble. I never reported you or anything. You have to make for what you did because I STILL have nightmares about you and things you did to me. You need to make up for this NOW.

      Ok, it’s time right now to make thing right. I’ll contact your parents if I have to. I expect $1000 dollars a month. Make it happen.

      I showed this to Mrs Spiffy and asked if it looked familiar, and she immediately named my ex, as she had made all sorts of bogus claims to people (but not police) during our breakup. I totally expect something like this to happen to me once the monthly money flow is severed.

      I genuinely hope that my son never gets married.

      1. Wow, what a nightmare. Don’t be a victim of this. You just say NO to it. Your acting like your scared stiff and you have no control over being extorted.

        You sound like your really damaged from that marriage. Take back your life. It’s unfortunate when a marriage doesn’t work out, but this person doesn’t own you.. Just take back your life, your entitled to it.

        1. “Your acting like your scared stiff and you have no control over being extorted.”

          I guess you missed the Kavanaugh confirmation hearing before the Senate Judiciary Committee with the “fake rape” women who recanted later?

        2. @ByHousing Wizard,

          You seem to misunderstand.

          What I have is an ex-wife who is bipoloar and narcissistic and/or psychopathic. There’s a lot I can and do say NO to, but I can’t control her actions and sometimes she tries to pull off shady crap.

          She doesn’t own me, and I’ve long since reclaimed my own her life (which pisses her off continually) but I still have to deal with her, and the family court system due to my minor children. If she want to make up fake claims to the courts and/or police, i DO have to deal with that. (which is why I maintain a huge file of documentation covering the last 10+ years).

          I’m not scared of her, but do get annoyed. Having to deal with it is not a choice I get to make as long as my children are around.

      2. I expect there to be shenanigans from her once child support stops in 2022.

        Sometimes the best defense is a good offense. Consider speaking with an attorney 6-12 months (or more depending on how financially aware she is) before payments stop to discuss and document your concerns. If/when you get the threat, let the attorney handle it. Your ex will be caught off-guard and forced to decide whether to hire an attorney. She should have a hard time finding one given those facts and timeline.

        1. I’ve already done that and consulted with the attorney who handled my previous modifications. My ex referrers to her as “That Evil Witch” which I take to mean that she does a good job.

          I’ve got a gameplan in place to deal with the end of child support. How my ex reacts to that.. we will see…

      3. I genuinely hope that my son never gets married.

        Probably he will be more careful in his choices than his dad was.

        My son dated his partner for 10 years before he married. It is a very solid relationship. He saw a lot of things growing up that made him cautious. I didn’t. I grew up in a very loving, sane and stable family.

        1. I’ve been on the phone with my son when he contradicted a small lie of his mothers. She then berated him non-stop until he ‘recanted’. It’s clear he is at least seeing some things the way they are. I’ve got some plans to help him once he’s 18+ and on his own to establish the skills and knowledge that I didn’t have at that age.

      4. I expect there to be shenanigans from her once child support stops in 2022.

        I just got notice from my bank that my last child support check is now scheduled for the end of the month. While my ex is definitely the freak out type illustrated in this thread, I don’t think she’ll freak out this particular time. First because the child support check is less than 10% as big as the alimony (my son was originally supposed to be with me more than 50% of the time and so they made the alimony bigger and the child support small) which will continue for another another 6 years. Also because we already had the conversation a couple of months ago at my son’s graduation and she did her mini-freak out then and tried to claim it was for one more year and I had to show her that it wasn’t. So I think she’s had time to process it. Which of course is ridiculous when you step back and look at it from the perspective that he doesn’t even live with her any more and she’s still trying to make me pay it.

        1. Carl,
          Congratulations on reaching that milestone with your child. I hope things will be ok for you for the remainder of the alimony duration.

          Which of course is ridiculous when you step back and look at it from the perspective that he doesn’t even live with her any more and she’s still trying to make me pay it.

          Have you seen how bad it can be in states like Massachusetts? In Mass, child support can continue until 26 if the child is “technically” in school. Many mothers have their kids sign up for a single class at the community college (and then drop it or don’t go) to keep extending the gravy train for another year for as long as they can get away with it. And that does no good for the child’s relationship with his father.

          I find that often ex-wives believe whole hardheartedly that they deserve to be maintained in a high lifestyle by their ex’s for the rest of their lives no matter how much they were at fault for the demise of the marriage.

          I was very lucky to divorce in Texas, which had a 3 year cap on alimony (spousal support) at the time. My settlement was front loaded and she was living high on the hog for those three years. She had her backup plan in place as she lined up a former high school classmate (while rotating through several guys) who was willing to let her have her “needs met on the side” and married just 13 days after the last alimony payment. She later found out that lifetime alimony was possible in my current state of residence, and in one of her typically delusional episodes came up with the number of $7K a month in her head as the amount of lifetime alimony that I “have cheated her out of” — no matter that 1) she’s remarried and 2) I didn’t move here until after my divorce was well underway.

  7. “The asking price is a $330,000 reduction on what it originally sought back in July 2015 of $780,000.”

    Another “I’m not giving it away!” greedhead chasing the market down. I love it.

  8. Is anybody else dealing with this windows update that must take like 10 hours or something? For the love of God what in the world are they thinking?

    3. Using Ubuntu’s latest stable release and its awesome.

      Was hiking north of brookings Oregon along the coast and ran into a young Australian couple with their infant looking to hike as well. They were renting an RV and going from Canada down to Mexico. They lived in Sydney and didn’t know what poison oak was. I was tempted to explain its effects in terms of their housing market but thought better of it.

    4. “…windows update that must take like 10 hours or something?”

      That’s way too long. I recently applied that to a win10 x64 v1903 in less than 5-min on a powerful workstation. What CPU and ram memory amount are you running there?

      1. When I made the comment, the update was only at like 23% and it had been close to 2 hours. The math was looking really ugly. It sped up after that and probably took closer to 3. Still, that is way too long.

        1. “Still, that is way too long.”

          Indeed. It can be numerous things, but poor performance is usually caused by lack of RAM, lack of hard disk space or an over-heating event driven by a bad CPU fan or dust-bunnies.

          I got a call-out for a Windows SCADA client crashing repeatedly. WTF? I was just out there a few weeks ago verifying its baseline. Since this was a production environment it is an immediate work ticket. Schitt, there goes my evening bicycle ride! Anyway, after a 90-minute drive to the site I see the mini-tower on the right side of the desk as before. However, some had placed a small refrigerator calendar on the front of the case covering the air intake vent, which I removed. Problem solved in less than 60-seconds!

    5. I’m pretty sure my computer downloaded the update without telling me. The fan on my Surface ran constantly for days, and actually overheated and shut off twice — I had thought it was the online Forge of Empires game, but I don’t think so. I literally put the laptop on ice (ice-pak from the freezer) to help it out. Mine updated overnight so I didn’t notice the update time.

    6. If the vast majority of what you do is web-based, then just get a chromebook and never look back. Boots in 5 seconds, updates are usually less than a minute, doesn’t get viruses, and costs like $300. Been using one now since my son got me one for birthday and it is glorious.

      1. My son has a Chromebook from his high school days. Seemed fine until we wanted to load Python on it for him to learn a little coding. Then it got complicated.

          1. Well…he IS a journalism major. I’ve told him that if he can be the best then the world can always use one more. Otherwise forget it. He thinks he can…we’ll see. Right now he’s learning the traditional ropes at a small town paper over the summer.

            But I told him he better take some tech writing classes too. At least I’ve seen those guys get a regular paycheck at companies that actually make money.

  10. Nice eye.

    Man says he was beaten in NYC for wearing MAGA hat

    Posted Aug 01 2019 11:47AM EDT

    NEW YORK (FOX 5 NY) – A New York City art gallery owner says he was viciously beaten in Manhattan by a large group of teens for wearing a “Make America Great Again” hat.

    Jahangir “John” Turan, 42, says it happened Tuesday evening on Canal Street. He was wearing the MAGA hat that he had purchased earlier in the day at Trump Tower.

    “I love President Trump. I think he’s doing a great job,” Turan said.

    http://www.fox5ny.com/news/maga-hat-beating

  11. Aug 1, 2019, 1:09 am
    Bitcoin Has ‘No Intrinsic Value,’ As U.K. ‘Moves Towards’ Crypto Ban
    Billy Bambrough, Contributor
    Crypto & Blockchain
    I write about how bitcoin, crypto and blockchain can change the world.

    Bitcoin and cryptocurrency regulation has been pushed into the limelight over recent weeks, thanks to social media giant Facebook’s high profile plans to launch its own potential rival to bitcoin sometime next year.

    The bitcoin price, which had been climbing on rumors that big technology companies were taking an interest in bitcoin and cryptocurrencies, has plateaued at around $10,000 per bitcoin after a number of countries rebuffed Facebook’s plans, unveiled in June.

    Now, the U.K.’s financial services watchdog has warned potential investors that bitcoin and cryptocurrencies have “no intrinsic value,” with some taking the caution as a signal the country could be moving towards a bitcoin ban.

    https://www.forbes.com/sites/billybambrough/2019/08/01/bitcoin-has-no-intrinsic-value-as-uk-moves-towards-crypto-ban/#79d2392f2d27

    2. The Fed meeting outcome, escalating trade tensions, and tepid jobs number are all bullish signs. So by all means necessary, back up the truck and load up on stocks!

      1. Tariffs are rising, the Fed didn’t calm markets — so stay bullish, of course
        By Steve Goldstein
        Published: Aug 2, 2019 8:45 a.m. ET
        Critical information for the U.S. trading day
        Getty Images
        Global trade talks have taken on a medieval feel.

        What the heck was that?

        President Donald Trump’s mid-session tweet announcing a 10% tariff on $300 billion of Chinese goods next month bludgeoned stocks (SPX, -0.90%), eviscerated oil, and buoyed bonds (TMUBMUSD10Y, -0.06%). The new tariffs will take the average U.S. tariff on total imports to 5.6% — the highest level since 1972, according to Bank of America Merrill Lynch data. The tariff level on imports heading into the U.S. was just 1.5% before the 45th president entered office.

        That’s not even the only major trade battle going on. Japan’s Cabinet on Friday approved the removal of South Korea from a “whitelist” of countries with preferential trade status.

        So with all that in mind, the Call of the Day is with Bank of America Merrill Lynch, which says “stay bullish.”
        …

      3. Tepid job market? Obama averaged 109,000 a month and took over near the bottom of a cyclical cycle so job growth should have been easier. At the time, the MSM was claiming that anything over 100,000 was more than enough to keep up with labor pool growth. Said this particularly in 2016 when GDP growth slowed to 1.6 percent for the year. We were told we were at full employment and that was the best you could expect. Now, 164000 is tepid growth? Particularly outrageous since this includes the Boeing problems. Trump could find a cure for childhood cancer and the MSM would criticize him for contributing to global overpopulation.

        1. 200,000 was the traditional rule-of-thumb dividing line between strong and weak jobs numbers, but maybe it’s different now.

        2. This Country was really screwed up when Trump took over. Where do you start? I think he’s coming at it from the standpoint of undoing some things. It just took decades to get this bad for mostly the majority working class..

          It’s pretty shocking to me what the Dem political platforms are.

          The vast middle working class don’t want to seep into the working poor, which alot already have.

          We were a strong working middle class Nation and that sector is fighting for their survival and their standard of living and freedoms.

          The elite power brokers would like you to believe that a strong upward mobility working middle class isn’t what America was. That this vast sector of working people cares more about diversity and political correctness than survival.

          When the Dems talk about what we are as Americans, they must be joking. We are people who like higher standard of living and the American dream that we earn. We are not commies waiting for the next hand out from our big government.

    3. Good Chapple should be hurt.
      Apple put profits over US workers and teamed with China. now we have a president willing to defend mainstreet over Wall street bad for housing prices in the Hamptons or the Bay area but might even be good for house prices in Ohio.

  13. ‘There are about 56,000 new apartments coming online in the next six months in Sydney.’

    Is that a lot? Seems like it would be a lot in Shanghai but maybe not in a really big city like Sydney.

  14. “300,000 households across Australia are potentially in risk of being mortgage prisoners”

    Nothing says Penal Colony like a mortgage after a housing bubble.

    1. Plantation, I prefer the term plantation.

      During the Good Ol’ Days slaves that were unfortunate enough to find found themselves located on plantations were coerced into going there. Currently the presence of slaves inhabiting plantations is the result of free choice.

      1. “find found” = “find”

        Slaves on these plantations not only choose to become slaves they even willingly stand in line up to pay for the experience.

  15. I thought I was having a problem with my hard drive until I learned how large the update was. I hear it is causing a lot of problems with printers etc.

    1. The seasonal Windows “Creator’s Updates” are several gigabytes of compressed packages, which can lead to problems on slower network connections.

  17. Really has not been 200000 since W in the middle of the first bubble(s)We really are an aging population and the labor pool does not expand that fast. But it probably still capable of growing more than 109,000 per month. A lot of Americans were unemployed or underemployed for too long. The disability social security trust fund has gone from broke under Obama to the best funded of all the trust fund under Trump. It is amazing how many new workers you can get when you pay American and not illegals type wages. Of course, even the American born children of illegals will not work for those wages. Thus their high dependency on government programs.

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