[zaph]

Quote

Rising property values have been an article of faith in the housing market for a generation of Australians who borrowed big as real estate prices marched ever upward.

• Know more? Contact czappone@fairfax.com.au

Now, though, some buyers are finding that their homes are worth less than the size of mortgages taken out to acquire the proverbial roof over their heads.

While the percentage of home owners with so-called negative equity remains tiny - about one in fifty of the 3 million households with mortgages - the number may well swell in 2012 if home prices extend their declines as some analysts expect.


Read more: http://www.smh.com.a...l#ixzz1h7YvwtmX

[Dose]

One in 50 is not tiny if the market continues to decline...it just takes two houses on the same block going into forced sale to set the market in motion for new, lower values.

I enjoy our spruiking experts blaming "Europe" and this new, unexpected community obsession to reduce debt. Priced Out Forever ...comes with a price.

If this is in the news I wonder how bad things actually are.
<edit spel>

This post has been edited by Dose: 21 December 2011 - 12:58 AM

[tux]

Ominous quote from that article:

Quote

Last week, the Fairfax-owned Australian Financial Review reported that one of the primary bank regulators, the Australian Prudential Regulation Authority, has ordered major banks to “stress test” their books for scenarios in which home prices drop 30 per cent and unemployment rises to 12 per cent.

Does APRA feel there is realistic risk that such a scenario might occur?

Scary stuff.