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skyscraper connoisseur
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Discussion Starter · #1 ·
HUNDREDS of families have been forced to sell their homes, or lenders have repossessed and auctioned them, in Sydney's west and south-west in the past year, property experts say.

There were a record 1400 auctions in the region in the year to March 31, nearly double the number in 2005, Australian Property Monitors figures show.

Michael McNamara, an analyst with the company, said the spate of auctions pointed to a big rise in distressed sales and repossessions in the region. Mostly, sellers in Sydney's cheaper property markets were going to auction because they had to, not because they wanted to, he said. "The big rise in the number of auctions isn't because the market is going well," he said.

"It's jumped because auctions are the preferred method of sale of trustees in bankruptcy and mortgagees in possession. I think that's a very disturbing figure."

The median price for an auction in south-western Sydney in the March quarter was $318,000, $22,000 less than the overall median house price in the region.

"This just brings home the fact that most of these are distressed sales," Mr McNamara said.

Dara Dhillon, the principle of Dhillon Real Estate in Ingleburn, near Campbelltown, said 95 per cent of auctions in south-western Sydney were mortgagee sales. But he said there were many more forced sales where lenders had encouraged borrowers to sell rather than face repossession. "This type of [forced sale] is a big proportion of sales at the moment," he said.

Mr McNamara and Mr Dhillon estimate that hundreds of families in western and south-western Sydney had been forced to sell their homes, or had had homes repossessed and auctioned by lenders, over the past year.

Meanwhile, the total debt burden on Australian households topped $1 trillion for the first time last month, Reserve Bank figures published yesterday showed.


Debt on housing accounts for about 86 per cent of household debt, with the remainder personal debts like credit cards and personal loans. The ratio of household debt to household income has reached 160 per cent, one of the highest in the world. Interest payments now soak up a record 11.9 per cent of household income, nearly three percentage points more than in 1989 when mortgage rates were 17 per cent.

The median price in south-western Sydney reached $381,500 at the peak of the property boom in early 2004, Australian Property Monitors figures show. But more than three years of weak demand has cut that median by more than $40,000. Prices have fallen by 42 per cent in Casula, 27 per cent in Fairfield and 26 per cent in Cabramatta.

Because so many mortgagee auctions were in a weak market, they are probably putting downward pressure on prices. Mr Dhillon said he sold a house in Macquarie Fields for $287,750 last year, but a similar home in the same street sold at a mortgagee auction for $220,000 last month.

http://www.smh.com.au/news/national...ell-their-homes/2007/06/29/1182624165339.html

So what will grow faster? Superannuation or household debt?
 

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160% is good
I think mine would be approaching 500%

Made up of a number of margin loans, capital protected products and alternative asset borrowing - and hence the ability to claim it as a tax deduction.

So it all ends up costing me an effective interest rate of around 3-4% after dividends and tax deductibility .
- i.e. nothing.

Hint: You will never become rich using your own money - borrow and invest!
 

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selling my body since 88'
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^^^ Yeah exactly. If you want to accomplish anything you will need to be debt. Debt has a bad stigma, but if you know how to use it's a very useful tool.
 

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I also find it interesting that the article completely avoids the fact that household assets have risen at a rate triple the rate of debt.

I will find some graphs to illustrate the point.
 

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skyscraper connoisseur
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Discussion Starter · #5 ·
This article discuss household debts such as credit cards. Spending credit card on plasma screen or new fridge doesn't make you any richer.

And there is a growing trend towards unsustainable debt especially mortgage repayments. Mortagee auctions does make significant total auctions in areas of Sydney.

This has nothing to do with capital accumulation.
 

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skyscraper connoisseur
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Discussion Starter · #7 ·

Shot at 2007-06-29

http://www.rba.gov.au/PublicationsAndResearch/Bulletin/bu_apr04/bu_0404_1.pdf

A few years old but it proves it's hardly a grim situation - then again the entire point of putting the original article up was to achieve some political agenda.
i did a search on the article and there is no hit on the word 'political'.

I still don't get how you ended up with that conclusive statement.

But thanks for the stats anyways. proves that the inequality of wealth is rising during the housing boom.
 

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selling my body since 88'
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2,241 Posts
This article discuss household debts such as credit cards. Spending credit card on plasma screen or new fridge doesn't make you any richer.

And there is a growing trend towards unsustainable debt especially mortgage repayments. Mortagee auctions does make significant total auctions in areas of Sydney.

This has nothing to do with capital accumulation.
That's true. I still find it hard to believe how someone could 'pay' for something like a plasma and have no real way to actually pay for it. Call me old fashion but with things like that if i don't have the cash i don't get it, hence why i almost never use a credit card. The credit card is there for emergency capital and is the last resort.
 

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skyscraper connoisseur
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Discussion Starter · #9 ·
That's the thing.

Credit card is not always used for emergency fund for average users. They get instantly enticed by banker's spin doctors in tv commercials.

It's the same goes for getting a mortgage. Yet people have these dreams to own their own home despite not having their ability to pay it off when there is higher interest rate.

Credit card debts are growing and growing. I bet very little goes towards their 'capital accumulation', instead their pure indulgence.
 

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Watch my Chops
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^^^ Yeah exactly. If you want to accomplish anything you will need to be debt. Debt has a bad stigma, but if you know how to use it's a very useful tool.
Yeah Australia does have alot of "Bad Debt" Investment through gearing though more risky is the only way to go. Otherwise my 5c wont get vey far.
 

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I contributed my 400k to the debt just recently.

And I am the same with consumer goods. I pay cash. Credit card is used while keeping your pay in a line of credit account reducing interest and you pay it off at the end of the month (with and interest free period on the credit card of course).

I like the people who buy crappy old places in outer suburbs that don't go up in value much so they can buy the latest brand new v8 ford/holden only for it to be worth half the price in 12 months.
 

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i've changed my mind
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lol, like we should care if people are to stupid too manage their own debts/finances. its not the government or howards fault. people should take some personal responsibility.
 

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lol, like we should care if people are to stupid too manage their own debts/finances. its not the government or howards fault. people should take some personal responsibility.
People do. But does the Treasurer? After all, he's claiming how wonderful a manager he is ... last night I heard from Alan Kohler that, after our debt was taken into account, we owned only $53,000 per head. If I was in that situation, I'd be really worried.

I don't owe anything, but I won't be voting for the Government.
 

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Watch my Chops
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^ NO! Rudd will solve all our problems - the day he is elected our debts will feel a lot smaller!
Would our economy be so flash if our consumers where more mature and spent less and if Costello had of not helped the property bubble (for ideological purposes) households would have allot less in bad personal debt.

Howard’s Economic management skills have at times contributed to household debt a far more conservative attitude to the box aspirational voters and the great Australian dream could have prevented this. Labor can’t and won’t fix our huge debt problems however the Liberals as a Government could have affected policy to reduce its rapid explosion.

The idea that Personal debt is always up to the consumer is false. I don’t meet many rationale people each day.
However society will probably learn from there mistake in the future.
 

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People do. But does the Treasurer? After all, he's claiming how wonderful a manager he is ... last night I heard from Alan Kohler that, after our debt was taken into account, we owned only $53,000 per head. If I was in that situation, I'd be really worried.

I don't owe anything, but I won't be voting for the Government.
I believe that $53k is financial assets (i.e. not including our home)
More often than not Kohler if full of crap....opps better not let my boss hear that

"While the mean household net worth of all households in Australia in 2003-04 was $468,000, the median (i.e. the mid-point when all households are ranked in ascending order of net worth) was substantially lower at $295,000."

http://www.abs.gov.au/AUSSTATS/[email protected]?OpenDocument
 
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