Expert predicts Australia’s mortgage bubble will burst and property values will plunge

Expert predicts Australia’s mortgage bubble will burst and property values will plunge

‘Insane, that’s the best word to describe the Australian housing market:’ Renowned expert predicts the mortgage bubble will burst and property values will plunge by 30 to 50 PER CENT
Investment expert believes Australia’s mortgage bubble to burst next year
Families are beginning to struggle financially and are looking at bankruptcy
Half of all new mortgages are sitting at interest only in Australia
Australian banks are lending money to people who simply can’t afford it
A renowned investment expert who predicted the mortgage bubble burst in Ireland the United States and Spain has warned Australia will be next.Jonathan Tepper believes property values will plummet by 30 to 50 per cent leaving investors with high loans and little return, reported Channel Nine’s 60 minutes.Not helping the situation are Australian banks which are lending money to people who want to invest in high risk areas or simply can’t afford it.As a result many Australians are already starting to feel the financial pressure.
Parents, Simone and Shane James, earned 0,000 a year between them and now they owe .3 million with no hope of repaying the loan.Shane and Simone failed to foresee the collapse in their investment suburb of Moranbah, a coal mining town in eastern Queensland.However the bank did and still approved the loan.‘[There is] a real possibility of a reduction in value and rental values for the proposed units… a downturn in the coal industry may result in a significant write off in value,’ read a bank statement.Unable to explain to their children the dire financial circumstances, Simone and Shane James question the banks willingness to accept the loan.
‘We’re not saying that we are not partially responsible for this, we did make a decision and we own up to that but the fact is it can happen to anyone,’ said Simone
Many Australians can’t afford to pay the principal on their loans and with half of all new mortgages sitting at interest only, disaster is expected to strike.
‘Insane, that’s the best word to describe the Australian housing market,’ said Mr Tepper.
Read more: http://www.dailymail.co.uk/news/article-3457077/Insane-s-best-word-Australian-housing-market-Renowned-expert-predicts-mortgage-bubble-burst-property-values-plunge-30-50-CENT.html#ixzz40onApXrl
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Expert predicts Australia’s mortgage bubble will burst and property values will plunge