some more cold hard facts

The following is what happened to some people I know over he last few weeks and out of respect the address will not be published.

The principle residence they owned in Balmain, Sydney, was due to be sold as they had purchased another property in the inner west of Sydney.

Doing an analysis of the surrounding area and realising that to bring their property up to the $1.5 million of similar properties in the area would require an input of some 200k the couple decided to go ahead and spend the amount on renovations.

The house was then put on the market and an auction date set.

Leading into the auction interest was very quiet and the owner started showing concern that even though 4 contracts had been sent out only one party had shown any interest. Worried that the auction would produce even worse results the owner (as he was committed to the property in the inner west) quickly secured the only interested buyer at $1,100,000.

If you consider that expectations for this property were 1.5 million and the sale price was 1.1 million, resulting in a 400k reduction, then the added 200k from the renovation means losses were were even further exacerbated.

Moral of the story: Its not only first home buyers losing money in this market.