Looks like its spreading...more supply less demand...= lower prices!!
More 'for sale' signs as screws tighten Article from: The Mercury SUE NEALES Chief Reporter May 07, 2008 12:00am
FOR sale signs are proliferating around some Hobart suburbs as more families run into trouble meeting their mortgage repayments and debt commitments.
There are already signs that the real estate market is slowing, with fewer properties being sold and Hobart house prices falling in March nearly one per cent.
The Real Estate Institute of Tasmania (REIT) warned yesterday that if house sales slow down further, price falls will be likely to follow.
But REIT president Peter Bushby welcomed the decision by the Reserve Bank of Australia not to raise official interest rates again yesterday.
Mr Bushby said that with higher fuel, food and power costs, many families were already finding it difficult enough to service their home loans.
The real estate internet website company, realestate.com.au, reported yesterday that there were more than double the number of houses listed for sale in the first three months of this year in Tasmania, compared with last year.
Separate REIT figures show a drop in Tasmanian home sales of 31 per cent in March on the previous month.
"There are more properties coming onto the market now and obviously fewer houses were sold across Tasmania in March," Mr Bushby said.
"But houses are still moving (being sold) and March did include Easter this year; anecdotally our members are reporting a better April."
He said it was important to keep the mortgage squeeze in proportion.
For a start, he said not all houses now coming onto the market were being sold by owners because they were finding it hard to repay their mortgages. And the number of forced or bank foreclosure sales -- known as mortgagee auctions -- was still minute, according to Mr Bushby.
But Lance Cure, Tasmania president of the Finance Brokers Association of Australia, is more pessimistic about the future.
He said it was clear from what was happening in Tasmania's courts that some lenders were getting tougher on borrowers who were finding it hard to keep up with scheduled loan repayments.
Other banks and finance companies have found their access to easy and cheap credit to loan out to borrowers is also starting to dry up, resulting in a new philosophy to "bail out" of potentially problematic loans early.
Contributing to the cost squeeze facing many families, says Mr Cure, are some poor budgeting decisions -- especially when furniture or whitegoods have been bought under the all-too-common no-interest-for-48-months "free" offers.
"Some lenders seem to be hanging in there and trying to work through their borrowers' distress, but there is no doubt others are looking to bail out and get their money back before it all gets too bad," Mr Cure said.
"Combined with a change in how and when some lenders collect their arrears, I think it is inevitable we are going to see more Tasmanians getting into difficulty.
