18 August 2011
MELBOURNE:- Landowners are about to be economically decimated as Australia’s severely unaffordable house prices reverse, says Prosper Australia.
- ‘Stale Stock’ on the market in Melbourne is growing exponentially
- The sheer volume of unsold property is now indigestible
- Recent price falls must accelerate
“We confirm our earlier warning to prospective homebuyers – those entering the market or trading up to more valuable properties – to stand aside as prices fall,” Prosper Australia Campaign Manager David Collyer said today. “Your buying will not arrest this powerful economic trend.
“Anyone purchasing at current price levels will suffer very substantial capital losses over about the next six years. Those who rely on a large mortgage will likely plunge into negative equity, where the property is worth less than the loan it supposedly supports.
Prosper has been tracking Melbourne’s ‘Stale Stock’ figures – property on the market for more than sixty days and unsold – as a quick indicator of change to the supply and demand equation and as a price change predictor. The raw data is from SQM Research.
“In the last four months ‘Stale Stock’ in Melbourne postcodes 3000-3207 has doubled, ballooning from 19,800 to 38,522. In the wider Melbourne and environs, 60,253 houses have been on the market for more than 6o days and remain unsold.
“At a modest $450,000 per house, that would be $27 billion in surplus housing just sitting there.
Notable hotspots include postcode 3029 Tarneit/Truganina/Hoppers Crossing (2289 stale properties), 3030 Point Cook/Werribee (3135), 3064 Roxburgh Park/Craigieburn (1269), 3076 Epping (913), 3175 Dandenong (834), 3199 Frankston South (919), 3337 Melton (1683), 3338 Melton West (920), 3754 Doreen/Mernda (1774), 3810 Pakenham (1840), 3977 Cranbourne (2234).
‘Stale Stock’ are properties whose sales campaigns have failed. Gardens were primped, interiors polished up, advertisements placed, open for inspections conducted, auctions run and … no sale!
While there are genuine reasons why some properties are slow to move, current stock levels point to other factors.
“Buying has simply dried up. A couple with two good incomes and a solid depost cannot afford these prices.
“New construction has slowed to a crawl because of the unsold stock. This means widespread layoffs in the building trades as projects are completed and new starts deferred,” Collyer said.
“We are entering the spring selling season when property is brought to market in volume. With this ‘Stale Stock’ already overhanging, prices must change.
“Across Australia, homeowners have eagerly bought the story property is wealth and prices can only rise, inflating the market price of Australian land to a ridiculous $3.5 trillion. Unfortunately, these values have been built on debt and we face difficult times as this frenzy is unwound.” ENDS
TODAYS LOCAL PAPER ON SUNSHINE COAST SAYING PRICES HERE UP AS MUCH AS 20% – WORK THAT OUT – JUST READ ARTICE ONLINE WITH LIST OF HOMES IN KAWANA LOSSING MORE THAN 20% OF PRICE OR WORSE AFTER RENO.THE YOUNGER UNEDUCATED DONT DESERVE TO BE RAPED LIKE THIS – CANT BE SAID STRONGLY ENOUGH.JUST BECAUSE THEY ARE NOT YOURS DOSENT MAKE IT RIGHT.
crash, crumble whatever they call it is inevitable and a must for us all in Australia to bring the market to an affordable condition. Couples/families should be able to afford a home with ease, a boat, a car this is the Australian dream – however the shear greed of our neighbourswith i am alright atttitude along with the whole housing subsidies, negative gearing what did we really expect – a wise man once told me – do not get a pension simply because everyone is, because “they” will take the money off you – i am still troubled to understand who exactly they are – but he was right.
The Australia dollar is high so we now lack overseas property investors and massively reduced holiday makers, we also pay more here than anywhere for food especially as the big 2 supermarkets have been allowed to monopolise the whole country – We are great australians so great that we believed in our own self esteem so much that someone doubled, trebled and qaudrupalled everything then we got knocked out – we are so great that we cannot and have not done anything about it whatsoever.
We should for the benefit of the future generations stop buying houses, stop buying certain food brands and enforce a correction or do we continue to be “i am alright jack” let the next generations worrry about it we made our money.
Sure we can do that – but that dont make us great, banks get bailed out – people do not, never trust an estate agent – never a truer word as most are same as car salesmen and we are paying for it now and even more in the years to come – so in many cases a crash is the only way – we made it happen so our generation will suffer the consequences