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Australia Real Estate
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Australia off the plan apartments 30 per cent price falls

http://www.afr.com/real-estate/off-the-plan-apartments-prone-to-30-per-cent-price-falls-20170308-gut7h4

Buyers of some capital city apartments bought off the plan and sold within 18 months are losing up to 30 per cent of their investment, confidential analysis by the nation's largest valuation company reveals.

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Australia headed for ‘economic armageddon’

http://www.news.com.au/finance/economy/australian-economy/australia-headed-for-economic-armageddon/news-story/998390d5128ed69e8799db3de9efe52d

AUSTRALIA is headed for an “economic Armageddon”, with record household debt, record foreign debt and a massive housing bubble creating a perfect storm that could “wipe out” millions of families if there is a global shock.

Feb 18, 2017 MUST READ ARTICLE

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Australia off-the-plan apartment settlements: JPMorgan risk is challenging

Settlement of off-the-plan apartment purchases is one of the major risks facing listed property developers in the coming year, according to JPMorgan.

"The banks followed this by stopping lending to foreign purchasers," the analysts wrote in a research note this week. "There are pockets of oversupply which is where settlement risk is likely to be more challenging.

http://www.afr.com/real-estate/keep-an-eye-on-offtheplan-apartment-settlements-jpmorgan-20170124-gtxo3o

Australian GDP catastrophe economic recession
GDP figures ‘not too bad’? Think again. We’re in for a rocky 2017

IF YOU believe the Federal Government (and some commentators), there’s nothing much to worry about even though the economy has suddenly stalled, and is going backwards by 0.5 per cent per year. They say there is plenty to be pleased with in the latest figures. If you look at the national income figures, it’s rosy days. And that’s true. The national income surged last quarter. But the surge had nothing to do with good economic management. It was simply because our dollar dropped during that period. National income measures the money earned by Australians, whether that comes from overseas or at home. This surged mainly because the price of iron ore and coal has started to pick up. Which, if you’re a mining company is great news. However, most of us aren’t mining companies.

http://www.couriermail.com.au/business/economy/gdp-figures-not-too-bad-think-again-were-in-for-a-rocky-2017/news-story/484dbb77a7d3af1d03b6fb80eb12f3bd

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Australian soaring unemployment and under-employment up to 23%

Gary Morgan, Executive Chairman, Roy Morgan Research, said: “Analysing employment trends around Australia reveals a shocking picture with the return of the ‘two-speed’ economy

http://www.roymorgan.com/findings/7079-australian-state-unemployment-under-employment-august-october-2016-201612011545

Alternate Article: Australian underemployment triggers mortgage stress.
https://mortgageeproperty.com/australian-underemployment-mortgage-stress.html

AUSTRALIA: economists warning on debt, underemployment and off-the-plan apartment settlements

Fitch Ratings Chief economists said rising underemployment, where workers can't get as many hours as they would like, is a risk to the economy

Lisa Claes, managing director of CoreLogic, said non-settlement was a growing risk for the unit sector. Using CoreLogic valuation data, "we can see a large proportion of valuations for off-the-plan apartment settlements are coming in under the contract price," she said. 

AMP Capital chief economist Shane Oliver said when unemployment and underemployment is combined, the rate is above 14 per cent in Australia, higher than the level in the US, which is around 9 per cent.

http://www.afr.com/business/banking-and-finance/financial-services/fitch-warns-on-debt-underemployment-risk-for-housing-20161122-gsumxa


Posted by: https://mortgageeproperty.com/

Australia Reserve Bank warning could send some developers broke.

The Reserve Bank has repeatedly warned about risks in the current apartment market, saying the huge number of new apartment blocks approaching completion could send some developers broke and leave the banks nursing big losses.

http://www.theaustralian.com.au/business/property/mortgage-stress-rising-in-regions/news-story/09d542bfa190bbed050dbc87d7c2f9eb


Almost 100 “distressed” apartments in Melbourne and Brisbane have been sold through Hong Kong-based Mortgagee Property in the past three months to bargain-hunting investors for prices 20 per cent to 30 per cent lower than developers’ original valuations.

The company, founded by Australian businessman Scott Talbot after the global financial crisis, has gathered more than 100,000 interested investors around the world seeking a bargain as apartment buyers are expected to rescind contracts and developers try to clear unsold stock. “We reactivated the www.mortgageeproperty.com platform 12 months ago, to prepare for the imminent downturn of the apartment market in Australia,” Mr Talbot told The Australian, noting there was “a huge credit crunch” going on.

View the Australian News Paper article here: http://www.theaustralian.com.au/business/property/mortgage-stress-rising-in-regions/news-story/09d542bfa190bbed050dbc87d7c2f9eb

View the original article here https://mortgageeproperty.com/australian-apartment-developers-exit-strategy.html

Australia’s richest man and property developer talks about the Australian apartment market: https://youtu.be/XQkvUyuKZPg

Full Article

Australian home owners in regional areas are falling behind in their mortgage repayments at a faster rate than city property owners as a result of rising unemployment in the country and the end of the mining boom.

A report published by Standard & Poors charting the east coast mortgage arrears rate found that Cairns, Townsville and Wide Bay home owners were most likely to be at least 30 days behind in repayments on their home loans.

The number of regional homeowners in arrears has increased 18 per cent in the past year to July, compared to the 2 per cent growth among metropolitan mortgagees.
Separate research from S&P, a global ratings agency, found ­Broken Hill in NSW, Queensland’s Armstrong Beach, Currency Creek in South Australia and Western Australia’s Butler had the highest rate of loans overdue in the country.

“Mortgage delinquencies in regional areas traditionally have outpaced metropolitan areas,” the report said. “This often has been the case because regional centres are more vulnerable to a downturn.” S&P analyst Erin Kitson said mining and manufacturing regions, especially in Queensland and Victoria, were struggling because of big job losses over the past two years. Mortgage arrears rates in Geelong, a key car-producing and manufacturing hub, rose sharply in the past year as thousands of workers were laid off.

“If you look at the areas where the arrears have been growing, it is primarily regions where industry or major employers have exited the area and that has led to an increase in job losses,” Ms Kitson said. “So you have a situation where people become unemployed but they still have to pay their mortgages

“The non-metropolitan regions of Australia tend to have economies which are less diverse compared to metropolitan areas, which means if you lose your job in Wide Bay there are going to be less opportunities than if you lost your job in Sydney or Melbourne.”
North Queensland MP Warren Entsch said Cairns was beginning to recover from an economic downturn that hit the city from the end of the mining boom in neighbouring regional areas.

“We’re going from strength to strength in Cairns; there’s a number of different projects which have been on the backburner for years starting work now,” he said.

“There’s two cranes on the skyline in the city. That’s the first time I’ve seen that in about a decade.”

Meanwhile, almost 100 “distressed” apartments in Melbourne and Brisbane have been sold through Hong Kong-based Mortgagee Property in the past three months to bargain-hunting investors for prices 20 per cent to 30 per cent lower than developers’ original valuations.

The company, founded by Australian businessman Scott Talbot after the global financial crisis, has gathered more than 100,000 interested investors around the world seeking a bargain as apartment buyers are expected to rescind contracts and developers try to clear unsold stock. “We reactivated the www.mortgageeproperty.com platform 12 months ago, to prepare for the imminent downturn of the apartment market in Australia,” Mr Talbot told The Australian, noting there was “a huge credit crunch” going on.

The Reserve Bank has repeatedly warned about risks in the current apartment market, saying the huge number of new apartment blocks approaching completion could send some developers broke and leave the banks nursing big losses.

At least 40,000 inner-city apartments will be completed in the next two years in Melbourne, Brisbane and Sydney, according to the central bank’s estimate.

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Australia’s richest man and property developers talks about the Australian apartment market: https://youtu.be/XQkvUyuKZPg

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Westpac Bank STOPS Lending to Hong Kong & Singapore Investors

Australia's second-biggest bank Westpac said it would stop offering new mortgages over property in Australia and New Zealand to Singapore and Hong Kong customers, including expats.

http://www.businesstimes.com.sg/banking-finance/australias-westpac-shrinks-asian-footprint

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AUSTRALIA: $120 billion worth of settlements at risk. Morgan Stanley research shows

A slowdown in the housing industry and a glut in high rise apartments is putting 200,000 jobs at risk and could drive unemployment up to 6.5 per cent, according to detailed research from US investment bank Morgan Stanley.

http://www.abc.net.au/news/2016-10-20/200k-jobs-at-risk-as-housing-boom-rolls-over:-morgan-stanley/7952478

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