Continuing on from Part 1, this article investigates why people might be feeling stress from the responsibility of paying their mortgage in the current market.
People are persevering under these borrowing conditions because of their desperate need to get ahead using property as an investment vehicle, put a roof over their heads or just to keep their credit report in tact. Banks are screwing the lid tighter and tighter, and when the next financial collapse occurs, they can guarantee they will not be the one in the transaction who loses their shirt.
The other part of the issue has to do with return on investment. It is very difficult to find property investments that “stack up” in the current market. Many properties are still overpriced because the buyers jumped in too early and paid too much. The risk that the market looks like it is on a long term upswing might not be the case, as what happened in 2010. There are other sellers who are stuck on the thought that the property market will soon recover to above 2010 levels and they’re holding out for their price.
All the while, slowly rising unemployment and negative income growth are holding back spending and the ability of the market to sustain higher rents. There seems to be a “stand-off” if you like, between the buyers “ability” to buy, the banks “reluctance” to take a risk and the “willingness” of sellers to meet the market. Have you noticed the number of advertised receiver sales has dropped? Not so, receivers are just not allowing agents to mention the property is in receivership. The tell tail sign is a house without furniture and occupants. And while there are still many distressed properties for sale, there are just as many distressed property owners affected by either pressure from the banks, no job or too much debt, which is all the same thing.
What can be done about it? Well if you are a buyer without sufficient purchase funds, you need to know if you can get a bank loan, then you need to understand how much you can afford to lose if things go wrong. As a seller who is stressed by any one of the issues discussed above, it might be time to reassess your situation and calculate how long you can stick it out before you do lose your shirt. A short survival period requires urgent action, whereas a longer survival period may give you some time to have an agent sell your property, if this is what needs to be done.
In either case, you could get in touch with Property Results and have your situation considered in detail and confidence to help you make the best decision in the current market. Remember, procrastination on an matter that requires urgent attention could make the matter worse rather than better. If it is a better outcome that you desire, then procrastination should be avoided.
