The calls to financial counsellors began about 18 months ago. Middle-aged, middle-class homeowners in Western Australia who had shifted their retirement nest egg from superannuation to property were suddenly unable to pay their mortgage.
It typically started with an investment property, often in the Pilbara mining towns of Karratha, Port Hedland and Newman. Purchased for $750,000 in 2012, when the market was near its peak, the property was now worth $300,000 and falling. The rental return, which had been $1,600 a week, had fallen to $370. Not enough to cover repayments.
Then came the kicker: the massive mining projects whose construction had fuelled the biggest economic boom WA had ever seen were now completed and required considerably fewer employees. The mining industry shed 46,000 full-time jobs between 2013 and 2015, and those who were able to find new employment were no longer commanding boom-time salaries.
Unable to keep up with repayments for either their investment property or their family home, and unable to sell either for a price that would cover their debts, they now faced losing both to the bank.
Nanette Williams, the chief executive of Pilbara Community Legal Service and an accredited financial counsellor, hears this story at least once a week. In the past 12 months, she and her team have become adept at negotiating with the banks, which she said had been “very understanding” of clients facing financial ruin.
For the rest of this article, click here: https://www.theguardian.com/australia-news/2017/may/12/theyve-lost-the-lot-how-the-australian-mining-boom-blew-up-in-property-owners-faces