Property market continues rocky ride

doesn't sound like a good time to be buying residential property!

 

Rally Erased

The gains in the U.S. were erased after American Home, a provider of loans to borrowers without top-rated credit, said $450 million to $500 million of loans probably won't get funded.

Oil's climb to a one-year high above $78 a barrel and a report that showed the biggest drop in home prices in at least six years also drove the retreat.

Financial shares also turned lower after investor Jeremy Grantham said up to half of all hedge funds may close in the next five years.

American Home plummeted $9.43, or 90 percent, to $1.04. The lender, whose shares stopped trading at $10.47 yesterday after it disclosed a cash shortage, has been cut off from credit and didn't have money yesterday to make $300 million of mortgages it had already agreed to provide, the Melville, New York-based company said today in a statement.

Concern subprime losses may spread were exacerbated by a report that two high-yield funds run by Australia's Macquarie Bank Ltd. may lose A$300 million ($255 million). The funds invested in secured corporate loans, the Australian newspaper reported, whose value was reduced by fallout from the U.S. subprime crisis. After the close of trading Macquarie said investors in the funds may lose as much as 25 percent of their money.

Bloomberg.com: U.S.

 

Nothing new in the news there by HIA and Australand- I'm sure that Australand must be building up big in the commercial/industrial sector in Vic judging by their comments.

New resi housing has had so many taxes and costs added and the margins after building are probably not enough for large companies such as Australand to survive, especially when competing with the established market.

I wouldn't say that it's not a good time to buy resi property nationally. After all, Australia is a big place made up of many markets so sweeping generalisations aren't really accurate. Take Sydney for example- it may have been gloomy for the last four yrs in some areas, but there simply isn't enough stock in some areas to keep up with demand. The LNS and Inner West appear to be on their way to a mini-boom situation, from what I've seen, and Brisbane is certainly a hot market too, with buyers falling over themselves to secure properties, especially in the traditional inner city areas.

 

Just had my new CQ build valued for handover on Wednesday.

Cost $380K, val came back at $565K.

48% in 4 mth's sound's pretty good, but it'll be the last one I do in the area for now.

Just a touch ****** I did'nt get that second block and do 2.

Dave