Bloodbath to hit Australian real estate?
According to the Courier Mail, bargain hunters are snapping up holiday homes in coveted beach locations up and down the Queensland coast as desperate owner slash their prices by up to 70%…
While prices soar in some coastal towns close to mining centres, astute buyers are managing to secure ocean- front homes in traditional tourist locations for $500,000 or more off peak prices as vendors cave after years of trying to sell.
One buyer scored an oceanfront unit in a marina development at Cardwell, halfway between Cairns and Townsville, for $157,000 – almost $300,000 less than it sold for in 2006. The unit had been on the market for three years.
A penthouse with ocean views in the same development sold for $570,000 less than its 2007 sales price.
RP Data senior analyst Cameron Kusher said buyers of the most affordable seaside holiday homes needed to be prepared for a long commute. But he said coastal market values had fallen across Queensland, meaning bargains could even be found in popular locations.
In another piece, a real estate advisor sounds bearish on Australia…
“The market has slowed substantially but residential prices are likely to fall up to 60 per cent, possibly even more, within five years.”
The outlook is even grimmer for land investments, which Mr Wirsz said are more speculative and will plummet by as much as 80 and 90 per cent in value.
Commercial property will also take a hit in line with the residential sector shedding at least 50 per cent of its value.
Mr Wirsz pointed to artificially low interest rates, high loan-to-value lending practices, overinflated property prices, unrealistic vendor expectations and Australia’s large number of second mortgages.