Australia

A vicious circle is imminent for Perth real estate investors facing the choice to sell or stay

“If the mortgage moratorium is over, the mortgage deferral period is over, and the rental market is very tight, that’s a real concern and there may be real problems.”

Damian Collins, president of REIWA, said the number of properties available for rent in Perth fell below 3,000 in September, compared to 6169 for the same period last year.

Washington’s real estate market was in recovery mode, but supply shortages continued and September sales fell 20% year-on-year to 10,656.

“Building bonuses help increase housing supplies, but those who choose to build will sit in rent for the next 18 months until the house is built, which is useless in the short term,” Collins said. Said.

Professor Laurie said investors tend to panic when there is uncertainty in the market.

At the end of the mortgage deferral period, people can be under intense pressure. Some decided to leave now and suffer losses in case the situation worsens.

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He warned that many people who had invested in the short term could get burned.

“It certainly happened in Perth over the last few years,” he said.

“Repaying a mortgage on that investment property can lead to a serious restructuring of their property and even threaten their family’s home.”

Raymond da Silvalosa, a professor of finance at UWA Business School, explained why there was no interest rate pressure and people who were usually on a budget close to the limit were forced to sell.

“Most people don’t like to realize losses, they don’t sell, and they keep doing it as long as they can,” he said.

“So if they are selling, they are in a more desperate situation than usual.”

He felt the market was rising, and if investors had jobs and some cash flow, they tried to retain their fortune.

Suburban home builders face long waits for payday

Professor da Silva Rosa said the worst combination for investors is to buy a house that is fully stretched or build a building in the outer reach area.

“If I can continue the course in the long run, that’s fine, but in the long run it could be 5 to 10 years,” he said.

“The ideal is to buy smaller, more affordable units that are closer to cities with more demand.”

Professor Laurie said it wasn’t good to buy investment property just because it happened to be cheap, or buyers thought it was relatively affordable.

“We have to think about what will happen in the long run. Many moms and dads investors don’t see the fundamentals behind real estate investments, which is where they can get burned. “He said.

There were a lot of investors who held their fortunes for a long time and were doing very well. According to Professor Laurie, it all depended on the details of the local market.

I understand buying home and land packages because I want to stay longer, but it wasn’t a wise decision when people invested in the desire to make a profit.

It takes a long time and major changes in the market to profit from building a project home using the government incentives currently offered.

“You need to be really safe in your employment and your ability to repay your mortgage,” said Professor Raleigh.

“If prices continue to fall in these outer regions … and if you have to sell within 3-4 years and get an 80-90% loan from a bank, if the market isn’t really. Play for you, you may have some problems. “

Daile Cross manages the WAtoday Newsroom.

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Place of originA vicious circle is imminent for Perth real estate investors facing the choice to sell or stay

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