YOURS geez - how're you left?!
[Ed note: I wrote this post two weeks ago, just as the eurozone was soiling itself and people were wondering if it’d be possible to foreclose on an entire country. I think it’s still relevant, though - maybe even more so.]
It’s a great time to buy a holiday house, sez the Smage oh-so-casually, because “prices in many places along the coast are down, some by as much as 50 per cent”.
Wait, _what? _But Aussie real estate never goes down! Certainly not by 50 per cent!
_At the same time, a two-bedroom home in [cashed-up-hippie enclave Byron Bay] opposite Belongil Beach has just sold for $1,125,000 after being listed for sale at $1,430,000 in March last year, down from $1,775,000 in May 2005._
For those keeping score, that’s a 37% drop in six years; and with a price-to-rent ratio that’s still north of forty - compare it to this almost-identical two-bedroom home in Byron Bay opposite Belongil Beach that rents for $550 a week - you can’t help thinking it’s got plenty of room to go lower.
**Update: **This rather good piece on the knock-on effects of falling Aussie housing prices ran a few days ago, as well:
Chief executive of home price data group Residex, John Edwards, said this week that sliding home prices could be a leading indicator of what was happening in the broader economy. A slump in house prices - the biggest source of wealth for most Australians - would further crimp the spending and borrowing needed to keep the economy expanding, he said.
“I can tell you that in the whole time I have been studying the market I have not seen the makings of such a perfect storm,” Mr Edwards said.
If you think you’ve heard this story before, you’re probably right.