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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Proud Deplorable who wrote (110973)	4/24/2010 7:18:18 PM
From: The Vet	2 Recommendations Read Replies (2) \| Respond to of 116555

April 24 (Bloomberg) -- Australia will tighten rules on foreign investment in real estate, and introduce penalties to enforce the changes, to ensure pressure isn’t placed on housing availability for local residents. businessweek.com Australia's housing market is still way overpriced as the crash that occurred in the ROW didn't affect Aussie prices. Australian homes are the least affordable when calculated by the average income and are still going up (18% or more last year in most areas) regardless of the rise in official rates (now 4.25%) and the reduction in government hand outs to first home buyers. The average mortgage for a first home buyer is $280,000 AUD at an interest rates of 7% and higher. There are a few observers who see this situation as a accident just waiting to happen which could be triggered at any time. These new foreign buyer rules, further increases in rates and any loss of buyer confidence could easily trigger a waterfall collapse in residential home prices at any time despite the fact that the Aussie economy is booming due to China's current demand for commodities. Australian home mortgages are never nonrecourse loans and on default the buyer is personally responsible for any balance of debt (including short sales losses) which remains for life even if they walk away unless they declare bankruptcy, so the banks have a lower risk in non-performing loans.