July 2011

US Congress veterans genuinely afraid of Aug 2 deadline for US debt limit decision – New York Times

July 30, 2011 by Editor · Leave a Comment 

Here is advice from veterans of past budget battles in US Congress that went to the brink: This time, be afraid. Be very afraid.

The seemingly unbridgeable impasse between the two parties as the deadline for raising the nation’s debt limit approaches has Tom Daschle losing sleep, as he never did when he was a Senate Democratic leader in the mid-1990s and Congressional Republicans forced government shutdowns rather than compromise on spending cuts.

“That was nothing compared to this. That was a shutdown of the government; this could be, really, a shutdown of the entire economy,” Mr. Daschle said. “You can’t be too hyperbolic about the ramifications of all this.” (more…)

Hundreds of thousands of US small businesses cost cutting, resulting in job losses and deepening housing foreclosure crisis

July 30, 2011 by Editor · Leave a Comment 

By Professor Samuel Bornstein.

Many believe that job loss is driving foreclosures. I believe that there is an overlooked factor that is impacting foreclosures.  It’s coming from small businesses who are cutting costs in order to survive in the sluggish US economy. The result is cost-cutting which is leading to job loss for their employees, which is leading to more foreclosures. 

A Bornstein & Song Small Business Toxic Mortgage Surveys (National, 11/08; California, 4/09; California Hispanic, 6/09), provides compelling evidence that during the Housing Bubble from 2004 to 2007, a significant number of small business owners refinanced their home mortgages to access cash for their small businesses. (more…)

Companies prepare for worst-case scenario with US economy

July 27, 2011 by Editor · Leave a Comment 

Although deemed unthinkable in recent weeks, US firms are now preparing for the worst-case scenario – the world’s largest economy defaulting on its debt obligations and losing its gold-plated AAA rating.

With the August 2 deadline set by the US Treasury fast approaching and lawmakers still at a quandary to harmonize on a deficit-cutting plan to raise the federal borrowing limit, the once inconceivable prospect of a catastrophic inability to meet debt payments is now a worrying possibility. (more…)

Canadian home loan arrears rising, trouble ahead in 2011

July 26, 2011 by Editor · Leave a Comment 

Four years ago when the Canadian federal government initiated the housing bubble by allowing 0% down payments and 40-year mortgages, it also opened the door wider to Genworth.

Today those insane mortgage provisions are gone, despite the damage having been done. Genworth, however, remains – the leading private provider of mortgage insurance in Canada.

Of course, Canada Housing Mortgage Corporation (CHMC) is the 800-pound gorilla (actually, a 600-billion-dollar monkey) of the mortgage insurance business, underwriting the lion’s share of high-ratio, high-risk mortgages on houses bought by people who have no money. (more…)

Chinese property market teeters on a precipice in 2011

July 23, 2011 by Editor · Leave a Comment 

Despite enticing smiles from attractive sales agents who beckon visitors to an exhibition for a new property launch, the cavernous hall in suburban Beijing remained virtually empty for hours at a stretch.

In contrast to the blistering summer heat outside, the languid sales campaign inside the air-conditioned hall reflects a chill that is spreading across China’s real estate market.

The government’s nearly 20-month tightening campaign has resulted in growing inventories of unsold homes and higher mortgage costs (more…)

Melbourne house sales lowest in 15 years

July 22, 2011 by Editor · Leave a Comment 

The number of houses sold in Melbourne last year was the lowest since the mid-1990s, according to new figures from Land Victoria.

Its Annual Guide to Property Values shows that 53,112 houses were sold in Melbourne last year, a fall of 13.35 per cent on 2009. It is a far cry from 2001, when the market was at its peak with 70,137 houses sold.

Despite the fall in numbers, median prices and total values still rose. (more…)

Moody’s Places U.S. on Review for Downgrade As Debt Talks Stall

July 15, 2011 by Editor · Leave a Comment 

Moody’s Investors Service put the U.S. under review for a credit rating downgrade as talks to raise the government’s $14.3 trillion debt limit stall, adding to concern that political gridlock will lead to a default.

The Aaa ratings of financial institutions directly linked to the U.S. government, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks, were also put on review for cuts, Moody’s said in a statement today.

The U.S., rated Aaa since 1917, was put on review for the first time since 1995 (more…)

Desperate big US banks cutting borrowers home loan debt to soften impending Option ARM financial crisis

July 15, 2011 by Editor · Leave a Comment 

As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked.

Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk. (more…)

Warning bells for Perth property unfortunately the bubble has burst

July 15, 2011 by Editor · Leave a Comment 

Perth’s  struggling property market continues to raise eyebrows, registering the biggest fall in land sale volumes in the March quarter while remaining the most expensive land market nationwide.

The Housing Industry of Australia (HIA)-RP Data residential land report emphasised that the slump in residential land sales in Australia has continued with sales declining for a sixth consecutive period in the March 2011 quarter.

“Of all the capital city land markets in Australia, Perth’s would be considered the most eye-brow raising,” the report stated. (more…)

Australian vacant land sales hit 10 year low, buyers are in control now

July 15, 2011 by Editor · Leave a Comment 

The volume of house lots sold in the March quarter have hit a new low, as activity in the housing market continues to struggle.

The Housing Industry Association-RP Data residential land report showed that the number of house lots sold nationwide fell 6 per cent to 10,000 in the March quarter, the lowest in the 10 year history of the measure.

Over the same period, the weighted median land value in Australia continued to climb by 0.8 per cent to $193,980, driven by a rise in the median value for regional Australia. The March quarter sales were 43 per cent below the volume turned over a year ago, the HIA said. (more…)

Green Building Council claims carbon tax will offer long term gain for short term pain

July 12, 2011 by Editor · Leave a Comment 

The Green Building Council of Australia has officially welcomed the Australian Government’s carbon price scheme but says more needs to be done to capitalise on the opportunities of Australia’s built environment.

However, the Housing Industry Association says the carbon tax will have painful repercussions for the industry and for housing supply and affordability.

HIA chief executive, association, Graham Wolfe said: “Unfortunately, jobs in Australia’s residential building sector and building product manufacturing sector will be lost under this carbon tax.” (more…)

It is a property buyers market, so start your research now & use the best real estate search engine available in Australia

July 10, 2011 by Editor · Leave a Comment 

Currently Australia is experiencing an over supply of listed property,  reduced demand from buyers, stabilisation of home loan interest rates,  and a strong resource sector,  which is resulting  in increasing migration and population growth.

The market may be close to the bottom and it may be a good time now to start conducting your research.

If you are keen to buy an investment property or buy your own home, take your time conducting research.   Be thorough, be methodical and conduct your own due diligence.

You can achieve this using the most sophisticated real estate search engine and research available in Australia today. (more…)

Housing bubble advocates stuck with misleading data claims Joye

July 9, 2011 by Editor · Leave a Comment 

In one corner we have journalists at The Economist newspaper, who in a recent survey make the extraordinary claim that Australian house prices are overvalued by 55% using their preferred benchmark. In the other corner we have a crowd of the most respected economic minds in Australia, including the Reserve Bank of Australia, the Commonwealth Treasury, almost all market economists, and leading house price index providers, such as RP Data and Rismark.

This latter cohort essentially contends that The Economist does not know what it is talking about. They argue that Australian house prices are not materially overvalued, and there is no reason to believe that they must suffer precipitous price falls in order to obtain some more desirable valuation benchmark. (more…)

Australian business profit expectations enter negative territory in 2011

July 6, 2011 by Editor · Leave a Comment 

Profit and employment expectations have fallen into negative territory for the first time in two years and sales expectations, while still in positive territory have also hit two year lows.  

The findings from Dun & Bradstreet’s latest Business Expectations Survey, which examines expectations for the September quarter, return key indices to levels seen just before the worst of the GFC and signals executives are uncertain about the start to the new financial year. (more…)

Australians borrowing less on mortgages but appear to be saving for a rainy day

July 6, 2011 by Editor · Leave a Comment 

Australians are borrowing less as house prices ease, further entrenching the culture of reducing debt set in train by the global financial crisis.

People taking out mortgages in June signed up for loans representing a lower percentage of their property’s value than at any time during the previous six months, according to data from Australia’s biggest mortgage broker, AFG. (more…)

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