Just thought I’d share some market intelligence. Plenty of spruikers out there saying the market is turning or has turned. I have no idea where they’re coming from or what they’re talking about. One thing for sure, they never seem to be able to back up their claims with any results that aren’t padded or don’t tell the whole story.
We do however, have sharks circling and taking bites into the market here as they look to park cash or feel that the market is maybe bumping along or near the bottom and they see a bright future ahead. Good on them. I’m glad they have the money to invest and wait because they’ll be waiting a long time.
Reported recently was a sale of a small high rise apartment block. The shark paid $6.5 million. The owners owed $14.5 million from their purchase in late 2006. Ouch!
Or another recent sale for $5.7 million where the sellers paid $11.2 million. And $3.8 million including stamp duty etc, for $2.7 million less agents fees and legals. Those types of losses are eye watering and they are happening every day.
The Gold Coast will continue to suffer as local and State governments argue over who should pay to fix our wrecked beaches, tourism accommodation operators report a 30-50% plunge in holiday bookings, the mining boom dies before our eyes, people stay at home instead of going on holiday and house prices, despite continuing declines, remain seriously unaffordable.
Speaking of unaffordable, I find it incredulous that media keep publishing some rubbish figures that home ownership is easily done on 30% of the main breadwinner’s income.
Gold Coast – say the main income earner makes $60,000.00 a year. In this economic climate that’s a substantial stable income. Take out tax and Medicare levy and they’re left with about $52,000.00. Loan repayments on a $390,000.00 mortgage swallow up $32,000.00 ayear. Add home insurance, rates, taxes, repairs and maintenance and a small capital reserve and there is easily $43,000.00 a year GONE. Let’s start quoting some realistic figures shall we? To own a very modest home here on the Gold Coast, having saved a $60,000.00 deposit, will set you back more than EIGHTY PERCENT of a primary income earners cash in hand. EIGHTY PERCENT. How on Earth can you feed, cloth, educate and otherwise care for your family on what’s left?