Here on the Gold Coast in the local Weekend Bulletin (P9)an...

Here on the Gold Coast in the local Weekend Bulletin (P9)an article states 'Thousands of Gold Coasters have fallen into rate arrears as rate debt goes through the roof'

It explains they uncovered this in their own investigation indicating the amount of rate payers now in arrears at EOFY could be up to more than $45 Million & is putting the council under financial pressure which has already started legal action against more than 2800 home owners.

Says the rate debt has increased 60% per year since 2008 with council hiking rates up 24% at same time & 18,000 property owners out of 240,000 are now in arrears with 310 issued judgements that could see some lose their homes.

The figures quoted are in 2008-09, 13,879 ratepayers defaulted owing $25.2 million & in 1st 6 months of 2010 18,644 ratepayers owed $38.4 million. (So, the $45 million is a guess from then how much it has probably escalated)

It mentions the obvious point that home owners here are in deep financial strife with mortgage, food, electricity & petrol costs etc taking precedence as there is no immediate consequence from not paying council rates.

Me: This is an extra telltale sign of how bad things really are. I don't think they should ever move to take peoples houses though, as Councils took advantage of the boom & brought Valuers in from interstate to reevaluate the property here at big city prices & hiked the rates up.
Many councils invested unwisely & need to make money up but they should go easy on locals who can't pay like defer them for a few years then arrange a payment scheme?

We sold up 2.3 years ago (at a savage loss due to our Super Fund & share portfolios evaporating) & our house was on a lakefront block (not on main river) yet our rates hit $3800 a year - spoke to the old neighbour recently & theirs is now around $5000 & she is a pensioner?
We're sitting back for now renting a house on a nearby lake but the owners of this rental paid $800k in 2007 for an old home with a bad floor plan then spent more money revamping it (still can never fix a bad floor plan though!) We pay $500 week rent but if they left their $850k+ in the bank they'd get $1,040 week instead?
They had 4 months sitting vacant since the last tenant as it really only suits a couple rather than for kids so they want us to stay as long as possible & they know if they put the rent up we'll just throw everything into a storage shed & go somewhere cheap overseas for a year instead.

What is strange is they recently sent around a valuer as they are going to loan against this house to buy another property (are they crazy - haven't they worked out the return on this one yet?) The Valuer stopped to chat as he was interested watching all my trading screens in action & he said that with what he knows about amount of mortgagee sales properties the Banks have ready to come on the market he wouldn't be buying anything for a very long time yet but his job doesn't allow him to divulge that to the property buyers who employ him individually or via a bank as they have already made their decision to buy & are entitled to own point of view so not into listening to his opinion - said it is up to the banks & lenders to decide who is or is not worth the risk not him (of course).

Even though I'm on the 'bear' side of the fence now, I still feel for those families that are in trouble & face uncertain futures just as we did when we had to sell our home after we spent 3 years building it, won 4 awards, then spent more time & money completing the outside only to toss it away a few years later at a massive price loss -even the new buyers sent us the biggest bunch of flowers I'd ever seen with a card saying 'Thankyou for selling your stunning house to us as we really love & appreciate all the effort you have put into it' - made us cry even more....! Tip: don't buy a large block of land as you need to fill it up with a big house & lots of exy landscaping!

We realise now we are lucky in the fact we don't have the same worrying issues as a family does with children to support & how hard it is for them to struggle these days to put food on the table (I do understand because I'm one of 6 kids brought up in a 2 brm house by one amazing Dad who juggled us with a full time army career away fighting in Darwin, Japan & Korean wars for our freedom!)
With all these escalating costs though the Govt & councils don't really seem to care no matter what they pretend to say they really do only think of their own pockets!

So...back on topic now...does anyone else want to delve into how their Local Councils are faring & if they also have same escalating default problem - will be interesting to collate all the evidence & actually see which regions are faring better or worse than others are?

Anyway...take care of your money whether it is in shares or property as it can all disappear in a puff of smoke!