Home loan defaults on millionaire's row

Wednesday 25 February 2009

Article by Mozo

The number of multimillion-dollar properties that are going up for sale because their owner couldn’t afford the home loan payment has shot up in recent months, new figures show.

According to the Australian, the number of “mortgagee sale” signs being seen on the Gold Coast’s prestigious Hedges Avenue, known locally as millionaire’s row, has increased substantially as wealthy owners have fallen behind on home loan payments.

And while the Reserve Bank of Australia (RBA) is working hard to make interest rate cuts and support the bottom end of the housing market, many wealthy Australians are falling on hard times as millions of dollars are shaved off the asking price of their exclusive properties.

“These were the suburbs that people thought would be insulated, but are becoming the worst-affected areas as the finance industry jobs market dries up,” said Liam O’Hara, senior economist for researcher Australian Property Monitors.

The Housing Industry Association is forecasting a year of misery for the Australian housing market, although the RBA’s interest rate cuts may provide some relief on the lower rungs of the property ladder.

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