How one 36-year-old used a $450,000 margin loan to claw back from negative equity, and why economists say the housing market is pushing people towards extreme financial risk.
When Timothy Son bought a $550,000 investment property, he thought he had cracked the code to building wealth. That is, until serious structural defects sent the apartment into negative equity . Suddenly, he owed more on his loan than the property was worth.
“I thought I did everything right, but then I still ended up in this scenario where I lost everything I had saved up to the age of 30,” Son says.
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A top property expert has warned first-home buyers using Australia’s 5 per cent deposit scheme risk negative equity as markets soften and fringe living costs bite.
Mortgage stress spreads as buyers fear negative equity Mortgage stress has taken off in the past three months, with severe stress surging in an array of very different suburbs as falling property values raise fears of negative equity.
