According to a June 11th Associated Press release, U.S. foreclosures increased 18% over this time one year ago, and the crisis is now spreading to prime mortgages due to high unemployment.
With property prices falling, jobs being lost and tightening credit conditions, Dubai is facing negative equity and repossessions for the first time. There are estimates that as many as 40% of the mortgages in Dubai are already in default.
Only just though. The predictable calls are now to extend the higher rate of the first home owner’s grant past its June 30 cutoff date. After years of a housing market supported by negative gearing by investors now, suddenly, debt is out of fashion and grants are back in favour.
More on First home owner’s grant is Propping up Australia’s Housing Market
Although the rate of mortgage defaults: or mortgage stress as the Australian Press likes to call it is nothing like the overseas rates it is on the way up in Australia.
The western suburbs of Sydney have been Australia’s hotspot for mortgage stress for sometime but the latest report from Fitch Ratings has three new areas which have rapidly increased their level of mortgage defaults. These include the Gold Coast, Regional NSW particularly Gosford, Woollongong and Newcastle, and last and somewhat surprisingly, eastern metropolitan Perth.
Despite reductions in mortgage interest rates and the big increase in the first-home buyer’s grant, the business of auctioning houses still seems to be in trouble.
As we have already reported Australian property auction clearance rates dropped along with most of the world’s stock markets. Improvement doesn’t look imminent either. Figures out today make interesting reading: so long as you are not trying to sell a property – then they are depressing.
