Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts

Saturday, September 6, 2014

Economic Data remains mixed - RP Data

RP Data reports the following:

Mortgage demand has started to level recently
  • The RP Data Mortgage Index (RMI) shows that mortgage demand has begun to level over the past couple of months.
  • ABS housing finance data shows a similar trend with the market largely driven by upgraders and investors.
Economic data flows remains mixed
  • Population growth is winding down but remains high on an historic basis.
  • Dwelling approvals have shifted much higher over the past year and are at their highest ever level on an annual basis.
  • With population growth slowing and building approvals remaining high (despite the recent fall) we may see a better relationship between approvals and population growth over the coming years.
  • Consumer sentiment has been weak since the Federal Budget but is slowly increasing.
  • The unemployment rate has hit 6.4% with employment growth quite slow.
  • Mortgage rates remain low with banks competing hard for their share of the home loan business.

Saturday, September 1, 2012

Recession on the way?

Thursday, May 3, 2012

Genworth Says Queensland is a Problem

U.S. mortgage insurer, Genworth, that has operations in Australia, released a report yesterday to Wall Street regarding its Australian residential mortgage insurance business.  See report here.  The report says that its overall performance by geography is solid, with the exception being Queensland.

Coastal Queensland is particularly pressured.  Delinquency development in coastal Queensland has risen to 1.13%, compared with 0.8% for Queensland and 0.54% across its loan insurance portfolio.  The peak to trough decline in values is 17% for FN Qld, 12% for Sunshine Coast, 15% for the Gold Coast and 8% for the rest of Queensland.  The average mortgage insurance claim in coastal Queensland has risen to over $120,000.  This is significant enough to report to Wall Street.  See article here.  And note this article.



Tuesday, February 14, 2012

Scott Street Apartments Go Under

Bank of Scotland has become mortgage-in-possession of the remaining unsold apartments in Waterford Properties' Scott Street development at Kangaroo Point.  The luxury complex, with one apartment per floor and a total of 12 apartments, was completed in 2010.  It has Brisbane city views, but looks West.  The development has at least $30 million of unsold stock at current list prices (that may be revised downwards).  Photos here.

The penthouse sold for $7 million, and other apartments sold for $7.65 million and $4.06 million.  One of the purchasers was Scott Hutchinson, who was the builder.

According to the AFR, demand for the high end of the market has been sliding in Queensland.

Place real estate agents said that the premium market had dropped back.  "Realistically, the top-end apartment market has come back 30% and in some cases 40%.  The market was overinflated.  We were going through a boom and the prices were ridiculous" said Lachlan Walker of Place.

Now I bet Place real estate agency didn't tell buyers a few years back that the prices they were paying were ridiculous!

Wednesday, September 14, 2011

NAB Blackists 127 Queensland developments

According to The Age, the NAB Bank has blacklisted 127 Queensland developments, and will not lend money in relation to them (or at least, will take extra special care before doing so).  Most of the properties on the list are serviced apartments, resorts or student accommodation. The list also includes inner-city apartments.

The list indicated the unnamed bank barred financing for all developments associated with the federal government's National Rental Affordability Scheme, an initiative designed to boost housing for low-income earners around the country.

It has been reported that most other banks have also refused to finance investors or buyers for NRAS properties, apart from St George, which accepts borrowers for one project in Queensland.

It has long been known that lenders often decline to provide finance for buyers of apartment buildings once they reach pre-set exposure limits, commonly when 15% to 25% of the total number of apartments have already been financed by the lender."

See Property Observer and The Age

Wednesday, June 15, 2011

Apartment Starts and Sales Drop

THE latest data from the Australian Bureau of Statistics shows a worrying trend for apartment developers with commencement of new product down almost 13 per cent in the last 12 months.

The downward trend for apartment starts and sales comes as Queensland makes history by becoming the worst state for mortgage defaults. Two per cent of Queensland mortgage holders are in arrears, according to Fitch Ratings – with Logan city rated the worst district in Australia for ‘mortgage delinquency’.

See Brisbane Business News and Brisbane Times

Wednesday, June 8, 2011

Too Much Debt

"These figures show a substantial shift in the indebtedness of Australian borrowers, who are now significantly more sensitive to moves in interest rates than they were 20 years ago," Fitch said.

"For this reason, Fitch believes any downturn could be significantly worse than the recession of 1991, on which the current mortgage default criteria is based.

See Brisbane Times

Saturday, February 13, 2010

Mortgage Stress In Brisbane

Mortgage stress is affecting just as many households in Ascot as it is in Acacia Ridge, according to the experts.

Repossession rates may be on the rise in Queensland but Ben Paris, of Debt Mediators, said the suffering was not confined to outer suburbs.

Source: Brisbane Times

Wednesday, February 3, 2010

Jingle Mail in the USA

"It was April 2006, a moment when the perpetual rise of real estate was considered practically a law of physics. Mr. Koellmann was 23, a management consultant new to Miami. Financially cautious by nature, he bought a small, plain one-bedroom apartment for $215,000, much less than his agent told him he could afford. He put down 20 percent and received a fixed-rate loan from Countrywide Financial.

Not quite four years later, apartments in the building are selling in foreclosure for $90,000.

“There is no financial sense in staying,” Mr. Koellmann said. With the $1,500 he is paying each month for his mortgage, taxes and insurance, he could rent a nicer place on the beach, one with a gym, security and valet parking."

Source: NYTimes

Sunday, January 24, 2010

Mortages and United States Residential Property

"MUCH has been said about the high rate of home foreclosures, but the most interesting question may be this: Why is the mortgage default rate so low?
David G. Klein

Related

Weekend Business: Richard Thaler on strategic defaults and home foreclosures.

After all, millions of American homeowners are “underwater,” meaning that they owe more on their mortgages than their homes are worth. In Nevada, nearly two-thirds of homeowners are in this category. Yet most of them are dutifully continuing to pay their mortgages, despite substantial financial incentives for walking away from them."

Full story

Friday, June 6, 2008

Comment on Matusik

A reader comments on the Matusik post from earlier this week:

"I think the report misses some important trends, there are also quite a few factual errors.

For one, not ALL US houses mortgages are non-recourse, only a few states including California. MOST US houses mortgages are recourse. The biggest difference between the US and Australia is the commodity boom, but how long will that last?

Second, all the 0-down, interest-only mortgages are mushrooming in Australia as well. Australia also has stated-income loans which is no different from the US.

Second, he entirely misses the point of what commodity boom does to evolution of cities. If he concedes that the commodity (particularly energy) boom will go on for years, which argues for a booming property market, then it is the inner cities or places with good public transportation will benefit. However, he was presenting a sprawling suburban future that is completely impossible with oil price heading for the sky. He predicts that people will start commuting from Blue Mountains, it is just not going to happen if gas price is on the current track.

He is also completely off the mark in predicting a mild US recession. Many financial heavy weights including Warren Buffet, Jim Rogers, George Soros etc have come out to say that this is going to be the worst recession since the Great Depression, which is a euphemism of saying Great Depression Episode II.

The funniest of all is, if he thinks everything is rosy, US will recover in 2009, and Australia's commodity boom will go on forever, why will interest rate FALL in 2009? Shouldn't interest rate fall because the economy is NOT doing so well???

I can understand that Matusik is always arguing that property can only go up up up because he is sponsored by real estate developers, but this report just looks way to biased, to the extent that he cannot even get facts right."