The Dilemma Ahead

Council Executives might well benefit from reading what's actually happening for taxpayers and the pressures on their budgets:

1. If Councils, LCC in particular, constantly raises their rates despite everything, their way of balancing the books, what's going to happen when the ratepayers just cannot pay?
2. Do Councils resume ratepayers’ houses and sell them for a song to their mates?
3. Does the Council resume the properties and rent the back to occupants of their choice?
4. Do we reinstate Poor Houses for fallen property owners who cannot pay their taxes and rates?
5. Will citizens refuse to pay rates that include hidden levies?
6. Will ratepayers go on granting permission to grow the pie for the benefit of Council Executives who oversight diminishing services?
7. Will ratepayers continue to endorse salaries to Council Executives that bear little if any relevance to productivity?
8. Can ratepayers expect any empathy at all on the part of Council Executives for their predicament as residents and service takers?
9. What kind of rating system are Council Executives going to advocate now in a falling property market?
10. Can property owners look forward to falling rates in line falling property values?
11. How are Council Executives going to assess ratepayers’ capacity to pay?
12. Will Council Executives continue to receive increasing performance bonuses out of step with diminishing property values and falling Council revenues?
13. When will see anything that resembles a serious critique of the services civic managers deal uyp to ratepayers?
    

And there are more questions still! All this is lot different to before and the rhetoric Council Executives are inclined to deliver.

Bewildered

Tasmania


FROM TODAY’S MERCURY
Housing debt traps buyers
ANNE MATHER   | October 14, 2012 12.01am

INTEREST-rate cuts have dealt an unexpected blow to thousands of Tasmanian homeowners burdened with crippling mortgages.

As struggling borrowers shop around for lower interest rates, thousands are finding their mortgage is higher than the value of their property.

Although the Reserve Bank cut official interest rates 25 basis points this month, the major banks have not passed on the cut in full.

Accountancy firm Ernst & Young says 66 per cent of people think there are better deals available than their present loans.

However, experts warn that shopping around for cheaper loans is an impossible dream for many highly mortgaged battlers.

Valuers have reported that some Tasmanian borrowers now have negative equity in their homes because of the stalled housing market.

Property valuer Matthew Singleton said some Tasmanian homes were being revalued at less than the price paid a few years ago.

Mr Singleton, the state manager for Propell National Valuers, believes people should have their homes revalued when they're looking at refinancing. He said: "If people borrowed at the height of the boom, they could now have negative equity in their property."

The Tasmanian Council of Social Service said mortgage stress was on the rise and the phenomenon was a "priority matter" for agencies.

TasCOSS chief executive Tony Reidy said mortgage pressure had left "many, many hundreds of very stressed families" around the state.

He said Tasmania was already struggling under the impact of job losses, especially since the collapse of timber giant Gunns and had the nation's highest unemployment figure, at 6.8 per cent.

Families were also reeling from rising power prices and it was the poorest who were the least able to invest in power-saving efficiencies, he said. Mr Reidy said many of these struggling families often had the largest mortgages.

They now faced the added financial pain of being unable to shop around for a better bank deal.

"Because of the different movements in the way the banks are passing on or not passing on the rate cuts, people are looking around at banks down the road," he said.

"But when they have their homes revalued, they are finding that the market price is not the value the home was mortgaged at."

Mr Reidy said this meant borrowers were "absolutely stuck" with their lenders as they did not want to reveal their mortgages were higher than the property's value.

NMD Data, a national database that lists mortgagee foreclosures, has listed 216 Tasmanian residential properties as mortgagee sales in the past financial year.

Managing director John Kovacs said that figure was only the tip of the iceberg.

The company only lists properties that are explicitly indicated as "mortgagee sales" but Mr Kovacs said banks preferred not to advertise them, to avoid fire sales.

He said first home-buyers were suffering most. Many entered the market at the height of the boom, mainly the result of the first-home buyers' grant. But TasCOSS said people struggling with payments should always speak to the bank.

Mr Reidy said banks were keen to make new arrangements, much preferring to see people stay in their homes rather than having to sell.