Brisbane real estate bargains sees mortgagee sales stir bargain hunters.
ONE person’s mortgage stress is another person’s bargain, and you could save hundreds of thousands on distressed properties.
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BARGAIN hunters have already scored hundreds of thousands in discounts off distressed properties, and if the experts are right there could be a lot more to come soon.
Pushed to the brink by bankruptcy, business distress, divorce or overcomitting finances, many homeowners have thrown in the towel - but finder.com.au money expert Michelle Hutchison said interest rate rises next year would see a lot more go over the financial edge.
“We’re at a really low point in the cycle so if it’s a struggle now it’s will be a real issue when rates do rise, and they will next year,” she said. “You really need to get on top of your financial situation now before those rises start to happen.”
Global ratings agency Moody’s has also warned the credit quality of new mortgages would deteriorate next year.
“All else being equal, new loans underwritten at these historically low interest rates are of lower quality than older loans underwritten when rates were higher, because of the greater risk that borrowers may not be able to afford loan repayments when interest rates rise to more normal levels,” said Moody’s analyst Alena Chan. “In contrast, mortgages originated prior to 2013 were underwritten at higher interest rates and borrowers would have been assessed on their ability to service the loans at these higher levels.”
The most recent Fitch Ratings report on mortgage delinquencies found Queensland was the worst state in the country on that score, with 1.08 per cent of payments past due for more than 30 days.
“It’s interesting to see increases in defaults when we haven’t seen any changes to the cash rate (this year),” Ms Hutchinson said.
She advised those who were having a hard time meeting payments now to talk to their lender about financial hardship provisions before it was too late.
Right now there are eight mortgagee in possession or receiver-controlled homes available in the Brisbane market via realestate.com.au, including several multimillion-dollar distressed properties.
A Robertson home at 32-36 Parnassus Street has already generated a lot of interest with over two dozen groups inspecting the property last Saturday - and a lot more expected today, according to agent Tom XiaoYi of Yong International Real Estate.
He said there was “fantastic” interest because the home was being put to market by receivers, to be sold at auction on December 13.
“The street was full of cars. It’s such a rare property to come on the market under such circumstances. You don’t see this often in Robertson,” he said.
A stunning riverfront home, 302 Jesmond Road in Fig Tree Pocket, has also been put to market by the mortgagee in possession. The Hamptons-style 6-bedroom home, which has grounds spread over 7203m2, has an RP Data-listed previous sale price of $5.5M in 2005.
Buyers in Brisbane have already scored massive discounts off distressed property including $115,000 saved off the previous sale price at 22 Adair Street in Bald Hills in July.
The previous owner put the value down as $600,000 in 2009, according to its RP Data sales history. They tried unsuccessfully to sell it for $599,000 in 2011, before it eventually went for $485,000 during the mortgagee sale - a massive 19 per cent discount.
A September mortgagee sale saw a buyer pay $1.447 million for a 3-bedroom 1910 home at 332 Bowen Terrace in New Farm - a prime 597m2 block with two street frontages.
Though the buyer paid $122,000 (9 per cent) more than the previous sale price in 2007 ($1.325M), it was still $143,000 less than the previous owner was asking for it in 2010 ($1.59M).
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