It's not all doom and gloom! Brisbane defies property downturn

Replies to This Discussion

Permalink Reply by Jim on September 28, 2008 at 13:51

I think that Qld is still a favourite destination for southerners to move to although I read a survey result somewhere earlier this year to suggest that the numbers have dropped off .The fact that high priced apartments and houses are selling to people who are in the high income bracket does not mean a flow on to the medium/first home buyer market in the current financial gloom.The amount of homes approved dropped again last month and there are some concerns for this market,which would be the mainstay of our growth .Actually their are people who are cashed up buying houses from people who have had to let their homes go at a lower price than they paid .So those cashed up people can grow their wealth at the expense of the overextended,who fall out of the home ownership group.This , of course ,is the way things are .I have some views on who should share the responsibility for this and therefore would need to be part of the solution .

• ▶ Reply

Permalink Reply by Jill Fraser-FatCat journalist on September 28, 2008 at 15:23

Hi Jim,
Yes, good point re the flow on not necessarily moving through to the other sectors.
I'm intrigued about your views that you allude to concerning who you think should share the responsibility of the cashed up growing their wealth at the expense of the overextended. Do you feel to elaborate on this?

• ▶ Reply

Permalink Reply by Jim on October 3, 2008 at 11:10

G'day Jill,
I typed out a reply to your question a few days ago and promply lost it before pressing the send button but this covers most of what I wanted to say.
I certainly do not think that the people who are able to take advantage of the situation by buying what is on offer are to blame for the situation.The world we live in is about choices and people who find themselves in any difficult financial situation have made the choice some time to take on the debt and the people who have successful dealings also the same applies.
Some problems arise by circumstances that we cannot control or ,some times maybe,by not keeping our eye on the ball , so to speak.I used to be in the hardware/building supply industry and we sold product to make a living.The banks product is money and they go about selling money with similar marketing and ,sometimes,rosy promises to gain market share.One big difference of course is that once you buy your building needs from me that is the price you are up for.Money markets are different .The price (interest) you are up for at the purchase time is not stable(although you can tie the rates in for a time)and you never know the finished price of the purchase.Now I know there are lots of reasons for this,banks borrowing from banks at differing rates,reserve bank decisions etc.
The problem ,to me anyway,seems to be in the cheap starting price for borrowers in the lead up to the current problems.In other words low or no deposit, therefore a lot more interest paid before gaining equity. The lending institutions may present their potential customers with a rosy picture of home ownership and leave the more realistic mechanics of taking out a loan in the small print which we should always read anyway, but don't.
As much as I hate giving more and more of our freedom of choice over to the government man maybe there are a few things that should be regulated to protect those who cannot help themselves.Like a minimum 20% deposit for home borrowers.This will make it harder for some wanting to purchase a home I know but may help them knuckle down to the saving habit in order to achieve a goal. It will also mean more people renting for longer but you can balance some of that against the real chance,in some situations, of people having to sell down the track at a loss and with a debt still around their necks.The banks need to look at their approach to "selling" their money as well .Areas such as ability to pay in a higher interest period,covering more realistic running costs etc etc.
So I am saying that the need for us to take responsibility for our decisions,(this goes for all areas of our lives actually)and with a more reallistic approach to the ability of borrowers to take the loan on board by the lending authorities are areas that may be improved on to help keep Australia the wonderful country that it still is.
Maybe a less grandeous starter home without the biggest tv etc inside would be a good consideration as well.

• ▶ Reply

Permalink Reply by AlRow on September 28, 2008 at 19:34

T'was ever thus.
The rich get rich and the poor get poorer
You have only to look to the US to see the way of the world. The poor sods who were diddled out of what little cash they had are now living in tents along canals and stormwater drains (20 million houses on the market) while the people who caused the whole sorry mess are quietly waiting for the $700billion to drop into their laps (who will get the first bite of that particular cherry ( after all there are a lot of backdated fees to be paid))
We have our own tent city growing down West End way, as more and more people find it impossible to cope with rental increases. So while there may not be any doom & gloom in the upper end of the property markey, there is a great deal in the middle and lower end

• ▶ Reply