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Recent Homebuyers To Find Equity Magic Has Vanished; SMH
Topic Started: 26 May 2012, 08:46 AM (498 Views)
muzza
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Recent home buyers to find equity magic has vanished


THE sluggish housing market has sparked predictions that the latest generation of home owners will be unable to rely on their home as a key source of higher wealth, as many baby boomers did.

Instead, analysts say people who joined the housing market in the last few years are unlikely to experience the ''magic money machine'' effect of bumper rises in the equity in their homes.

In the late 1990s and early 2000s, house prices more than doubled, a trend that benefited even highly indebted owners.


Rising equity - the proportion of the house's value belonging to the owner, rather than the bank - was credited with boosting consumer confidence and spending.

However, analysts say the trend is unlikely to return, with Sydney house prices down 2.6 per cent in the past year and the Organisation for Economic Co-operation and Development this week warning of further risks nationally.

The head of research at RP Data, Tim Lawless, said home owners who bought in the last four years would find it much harder to build up equity.

December figures from RP Data show 6.4 per cent of home owners had seen the value of their home fall to less than they paid for it. This proportion is likely to increase after recent price falls.

''Realistically, anybody looking to build up wealth and equity in their property needs to have a long-term view. They're not going to be accumulating equity in their property in the current conditions, or over the next couple of years, very quickly,'' Mr Lawless said.

A consultant, Martin North, said his surveys of consumers had found those who bought in the last four years - about a third of home owners - had received little or no capital growth.

http://smh.domain.com.au/real-estate-news/recent-home-buyers-to-find-equity-magic-has-vanished-20120525-1za40.html
Edited by muzza, 26 May 2012, 08:47 AM.
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Jacks money
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so they turned off comments ....

they could have done analysis on the % of thos who bought in the last 2 years who are in the red ..... not 4 years
but hey I bought a place during the last few months and i have know idea if i am behind or in front. I would suggest behind because as soon as you pay something then you just paid more then any other mug .... so yes on that deal with stamp and exit agents, probably behind
It’s not getting any smarter out there. You have to come to terms with stupidity, and make it work for you - Frank Zappa
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