Sydney Property Bubble
24-06-2015, 10:58 PM
Even with tdsr and some big losses here, sg market is still strong. U wonder why some hnwi need to take on losses. And tdsr is no monster compare to Australia servicing standards. And do not underestimate how rich people are which is unfortunately how a capitalist world operate.
24-06-2015, 11:32 PM
Here to stay: Roger Luo’s 50-year vision for China’s Golden Horse
THE AUSTRALIAN JUNE 25, 2015 12:00AM Samantha Hutchinson Property Writer Golden Horse chief executive Roger Luo. ‘If you can get one purchase a year, then we think that is good’. Source: News Limited China’s Golden Horse Group is on the hunt for more major Sydney residential sites with a vision to become one of the country’s most longstanding developers, still building and buying property in 50 years’ time. “We’re not concerned about one or two years, and I don’t know why people are so focused on that. It should be 50,” according to Mr Roger Luo, the general manager of GH Australia. “People focus on the current statistics and current sales, but this is a free market and we care more about the long-term.” The Australian arm of the Chaozhou-based company made its first Australian acquisition in 2012, but burst onto the radar last year with a $380 million site purchase in inner Sydney. Its local portfolio includes four large-scale resort and residential assets and a pipeline of more than 2000 apartments. “We don’t feel like we’ve gone very fast on the expansion, for us its just normal,” Mr Luo told The Australian. “When you compare it to what is happening in China, it’s still a (slow) rate.” Internationally, Golden Horse has completed more than 20 projects in China since 1989, making up more than 3 million square metres of apartments, hotels and golfing resorts across Beijing, Shanghai, Guangzhou and six other cities. Ambitious population growth targets in regions including NSW and the Gold Coast — which aims to boost its population by 50 per cent by 2015 — have prompted the group’s Australian expansion, according to Mr Luo. “Australia has much better systems and the market is more transparent. The main reason why people pay higher prices is associated to the policy of Australia which ... forecasts more population in the future,” he said. “A lot of people in the market focus on why the prices are so high, but this is a business — you don’t just focus on it for a few years: we look for long term. “The reason why we’re so committed is because we see the long-term vision of the way the market is moving.” The group spent more than $25m buying the Noosa Springs Golf Resort in 2014 and the Links Hope Island in 2013. It is about to turn the sod on its $175m Brisbane apartment development, Icon at Milton. Mr Luo was unable to comment on reports the group has paid more than $380m for Goodman’s 7ha Ashmore Estate in Erskineville, citing a confidentiality agreement. Industry sources say the development application for the 7ha site near Erskineville will be the biggest development application ever to be processed by the City of Sydney. Other sources indicate that local architecture groups including BVN and Scott Carver have been tapped to submit for the design competition on the site, which could yield 1700 apartments, within a broader community of 6000 residents. Internationally, the group’s core focus is luxury residential and tourism developments centred around golf communities. But Sydney’s residential market is its biggest interest currently. “We feel very comfortable and confident in Sydney ... you have lots of projects but we still feel there is not very much supply. And even if supply becomes more balanced, more and more people will be drawn to features like interior design and good architecture,” he said. The group arrived in Australia expecting to transact on one site every six months. Management now accepts sites might only come up every 12 months. “If you can get one purchase a year, then we think that is good,” Mr Luo said. He is frank about the appeal of a number of sites within commercial and industrial landlord Goodman’s portfolio, “They have very nice sites, they are a good choice, it’s the most attractive portfolio,” he said. “And in Sydney I think that if any company has a large holding of land, they are either a developer or they are Goodman, and Goodman does not develop. It’s good.” Mr Luo concedes the group’s next purchase might have to be on a “complex” parcel of land that needs unlocking through rezoning, protracted sales processes or more complicated development approvals. The comment could worry local developers such as Mirvac that have openly touted their planning know-how and ability to broker complex deals with landholders as the biggest weapon they have to avoid painful bidding wars on residential sites with well-capitalised offshore groups. “There’s no choice, we have to compete with other companies. It’s the market; if we want to continue to have a business, we need to compete like them,” he said.
28-06-2015, 11:02 PM
NSW budget gets seal of approval
Carolyn Cummins 589 words 27 Jun 2015 Sydney Morning Herald SMHH English © 2015 Copyright John Fairfax Holdings Limited. The NSW government's 2015 budget proposals have been welcomed by the property sector, with agents saying the commitment to funding of planning and housing in NSW will have a positive impact on the state's property sector. In the budget, the NSW government has released new land and housing for up to 170,500 dwellings for development in the west, increased infrastructure spending of a further $590 million to accelerate major infrastructure projects, including the Sydney Metro (city and south-west) project, which is being welcomed by the industrial sector. Given the high prices for Sydney homes, the increased land availability will be welcomed by the developers, Mirvac, Stockland and Frasers' Australand. The areas highlighted for growth in the budget will be Greater Sydney, including Blacktown, The Hills Shire, Camden, Campbelltown and Liverpool, Local Government Areas (LGAs), which are considered the growth areas of metropolitan Sydney. New projects will also be on offer for developers such as Lend Lease to construct new roads and intermodal transport zones. There is also the possibility that a third airport will be built in Sydney's Badgerys Creek, to add to the new development pipeline. While commercial and industrial property rely on a strong economy to keep growing, the retail sector is enjoying increased demand for furnishings and whitegoods for homes being built and renovated. JLL's NSW managing director, Michael Fenton, said the funding would play an important role in the continued development of the state's residential property sector. "The $400 million allocation to the Housing Acceleration Fund in this year's budget is a significant addition to the initial amount and a positive for the house and land market in NSW, particularly Sydney. It will help fund the necessary infrastructure to speed up the delivery of land supply in key high population growth areas," Mr Fenton said. He added that another positive for the property sector announced in the NSW state budget was the $19 million allocation to set up an independent Greater Sydney Commission, responsible for implementing the metropolitan growth strategy released in December 2014, A Plan for Growing Sydney. "The development of six sub-regional plans will provide greater clarity on the magnitude and location of future population, housing and employment growth within each of the areas," Mr Fenton said. JLL director of residential research Rupa Ganguli said the funding announced in the NSW state budget would ensure better housing supply and have a positive impact in markets such as Sydney. "Prices have been driven up due to a housing shortage over the past five years, with affordability an issue as price growth has been well above income growth," Ms Ganguli said. Malcom Tyson, managing director of industrial at Colliers International, said the active urbanisation of Sydney was having a dramatic impact on the supply of industrial property, and changing the profile of many traditional industrial areas. "The industrial sector is benefiting significantly from a number of the infrastructure projects that are planned or currently in the works," Mr Tyson said. "The Enfield Intermodal, WestConnex motorway and the Moorebank Intermodal are all projects that will have a direct impact on the accessibility of Sydney's growing south, south-west and western industrial suburbs." He said Sydney's industrial landscape had undergone significant change in recent years, as the growing population had led to the urbanisation of many centrally located industrial suburbs such as Redfern, Moore Park and Alexandria, driving industrial occupiers further afield. Fairfax Media Management Pty Limited Document SMHH000020150626eb6r0003o
28-06-2015, 11:37 PM
Jun 28 2015 at 1:45 PM Updated Jun 28 2015 at 5:08 PM
'Clear trend' Sydney auctions are starting to cool The most expensive home sold at auction in Melbourne was this five- bedroom house at Kew for $4.58 million. supplied by Matthew Cranston Clearance rates at home auctions in Sydney and Melbourne are starting to cool, faster than the usual winter seasonal conditions dictate, and Sydney posted its lowest non-holiday strike rate for the year. Even with an 82 per cent clearance rate on the weekend in Sydney where $500 million worth of homes changed hands, Domain senior economist Andrew Wilson said that the market was showing signs of easing. "I don't think this is just seasonal - I think there is a clear sense that sellers expectations on price might have overreached," Mr Wilson said. "In May Sydney reached a clearance rate of 89 per cent, but it has tracked backwards since. This is not a one off scenario, it's a clear trend." With Sydney house prices labelled "crazy" by the Reserve Bank of Australia governor Glenn Stevens, and ample warnings from other prominent economists including Treasury secretary John Fraser, some potential buyers have started to reconsider the market. Mr Wilson said that Domain's forward tracking showed clearance rates would continue to fall in the lead up to the Spring selling season. However there may be some stand out sales as the market starts to ebb. In Melbourne, where the clearance rate hit 79.6 per cent, the most expensive home sold at auction was a five bedroom house at Kew for $4.58 million. The property at 20 Studley Avenue was snapped up after nine bids and fetched $580,000 over its reserve. The property had sold for $3.1 million just 18 months ago and has had about $500,000 worth of renovations since. "The auction was one of the quickest I have seen," selling agent Ray White's Belinda Van Suylen said. "The purchaser had bid at a few other auctions and missed out and I think he was a little more aggresive at this auction." Ms Van Suylen said that while the weekend's result was strong she had started to get a sense that the market was cooling. "I think we must be at the top now. There are buyers but it does get a bit patchy - I think the talk of the bubble in the media means some buyers are just sitting back and waiting now." Melbourne and Sydney's auction clearance rates have been, on average, about 10 per cent higher than over the comparable weeks one year ago. CoreLogic RP Data recorded the strongest clearance rate in Melbourne was across the North East region at 85.8 per cent, followed closely by the Inner East region with 85 per cent. In Sydney the strongest region was Ryde with 90.6 per cent of the reported results clearing at auction. 
Typical market reaction to hold on in expectation of higher prices but start selling in droves when the herd thinks prices are going down.
CBA the biggest lender has started their tightening measures on 27/6 so the effects should play out in the next few months. No easy credit anymore, market sure go down. ASX is also down some more. When the margin calls start coming in, people will have to start selling their property and expensive cars. Tide is going out, those lending at 97/95% LTV with multiple properties should be found swimming naked pretty soon...
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
29-06-2015, 01:13 PM
U can patiently wait for your crash...
(29-06-2015, 01:08 PM)BlueKelah Wrote: Typical market reaction to hold on in expectation of higher prices but start selling in droves when the herd thinks prices are going down.
01-07-2015, 10:35 PM
http://www.smh.com.au/business/markets/h...701-gi21tw
House prices in a bubble - but what will make them pop? Date July 1, 2015 - 10:38AM Rose Powell Rose Powell Journalist View more articles from Rose Powell Follow Rose on Twitter Email Rose Email articlePrint "Housing is showing some bubble-like features, but it lacks a trigger to pop it near-term.": UBS senior economist George Tharenou. "Housing is showing some bubble-like features, but it lacks a trigger to pop it near-term.": UBS senior economist George Tharenou. Photo: Rob Homer Australian property prices are in a bubble and heading towards a correction in the next two or three years, says a leading investment bank. UBS crunched the numbers and has done a historical comparison that indicates soaring property prices in major cities across Australia have begun to exhibit some bubble-like characteristics but there is no sign yet of an impending cause for it to burst until 2016-2017. The wealth group said it expected a "stronger for longer home building boom" but detailed how worsening affordability and an inevitable rate hike by the Reserve Bank of Australia will cause a price correction in the next two or three years. "Overall, housing is showing some bubble-like features, but it lacks a trigger to pop it near-term," senior economist George Tharenou said. A rate hike by the RBA will be key to a price correction, said Mr Tharenou, as home prices growth was hit by interest rate increases in 2003, 2007 and 2010. "Those downturns were only triggered when the RBA hiked," he said. "Historically the key catalyst for housing approvals to peak is RBA rate hikes; not excess supply or unemployment." The average house price to income ratio is also tracking at record rates of 5.5, similar to bubble-like peak levels prior to the corrections of 2003, 2007 and 2010. The report detailed the how low interest rates increased demand, including making property more affordable, in the short term. The RBA governor Glenn Stevens has steered clear of outlining when rates may be raised, but used a speech in early June to indicate the bank has not ruled out further rate cuts. House sales in June surged ahead to an average of 10 per cent nationally, with Sydney up by 16 per cent. In late June, BIS Shrapnel warned home owners had between one and two years before an inevitable housing price correction began in its Residential Property Prospects report for the next three years. The report said Sydney and Melbourne prices would start falling from 2016-2017 because of a significant increase in supply, slowing migration, worsening affordability, weaker investment returns and the threat of rising interest rates set in. Most economists at Australia's leading banks and financial institutions do not anticipate a rate increase until the end of 2016 or beyond. After the most recent rate cut, financial markets have been pricing in just a 30 per cent chance of a rate cut over the next 12 months, the longest odds for another cut in months. Economists at all four major banks, which cumulatively manage the bulk of Australia's home loans, are predicting no rate cut or rise in the next 18 months as they expect the RBA to wait to see if predictions of ongoing weak wages growth and an expected pick up in consumer spending are accurate before making any further changes.
04-07-2015, 09:09 AM
NAB chief Andrew Thorburn hoses down housing bubble fears
THE AUSTRALIAN JULY 04, 2015 12:00AM Richard Gluyas Business Correspondent Melbourne NAB chief hoses down bubble fear NAB boss Andrew Thorburn: ‘I don’t think it’s a bubble’. Picture: Britta Campion. Source: News Corp Australia Andrew Thorburn has hosed down suggestions of a housing bubble in the Sydney and Melbourne markets, arguing there are sound economic reasons for the price increases and no apparent trigger for a collapse. The National Australia Bank chief executive said there was no silver bullet to rein in excessive price rises, which have cruelled the home ownership dream of many Australians, although he conceded that the rate of price growth might be unsustainable. “The causes are strong demand, lack of supply, and pretty-creditworthy customers in an economy with very low interest rates and unemployment a bit above 6 per cent,” Mr Thorburn said. “So I don’t think it’s a bubble when you look at the fundamental drivers of the price growth.” Any collapse in the property market, he said, would require a “massive” change in the economic environment, given the population growth in Sydney and Melbourne. Interest rates would have to spike from their record-low level of 2 per cent, and/or unemployment would have to surge — scenarios that the NAB chief assessed as “possible but unlikely”. Regulators have been using a number of measures to try and rein in runaway prices, with the Australian Prudential Regulation Authority setting a 10 per cent speed limit last December on growth in investor home lending. Mr Thorburn said NAB’s annualised growth in the month of May was still above the APRA threshold. “But it’s coming back every month,” he said. “We have a regular, ongoing dialogue with APRA and they know our position and when we’re going to get back to a certain number, and they’ve accepted that. They understand our pipeline.” With APRA likely to respond sometime this month to the capital recommendations in the Murray financial system review, requiring the major banks to hold more capital against home loans, Mr Thorburn downplayed the likely impact on profitability. NAB, for its part, is a mortgage minnow, with its share up from about 12 per cent in 2009 to about 15-16 per cent. This has fuelled suggestions that the Sydney home-lending behemoths, Common- wealth Bank and Westpac, will suffer disproportionately from APRA’s move to lift average mortgage risk-weights to 25-30 per cent. “We need to see what APRA does, but it’s still likely that mortgages will have a very attractive return at the margin,” he said. “The return will go from high to quite high, so it will have a marginal impact but not a massive impact.” NAB, with its leading business lending franchise, had seen a small pick-up in demand for credit after the recent federal budget, which featured an immediate tax write-off for small businesses purchasing items worth up to $20,000. Mr Thorburn said the policy had spurred activity in asset finance, and the government’s move to return to surplus in a staged rather than abrupt process was building more confidence. “I was in Canberra a few weeks ago and my message (to the government) was to get the budget passed,” he said. “(The budget) is fine, but you have to get it through the Senate and get it under way.”
05-07-2015, 08:56 PM
Keen tenants queue for Barangaroo towers units
Mercedes Ruehl 424 words 2 Jul 2015 The Australian Financial Review AFNR English Copyright 2015. Fairfax Media Management Pty Limited. Developer Lend Lease has already received 1200 expressions of interest for the yet-to-be-built high-rise residential towers designed by Renzo Piano at Barangaroo South, reflecting the huge undersupply of new units in inner-city Sydney. Sources told The Australian Financial Review there has been huge interest in the roughly 750 units to be known as One Sydney Harbour. Inquiries, which include a refundable deposit of $10,000, now total 1200, it is understood. Sydney is going though an immense change with thousands of new apartments due to be delivered over the coming years. But it follows a period of long undersupply, which has meant new residential towers, such as Greenland's Greenland Centre near Town Hall or the Darling Harbour Live project by Lend Lease, are in high demand from both local and domestic buyers. Lend Lease managing director of Barangaroo South Andrew Wilson said no pre-settlement contracts have been issued for One Sydney Harbour but plans are well under way to launch the three residential towers at the end of the year or early next year. "We are working closely with Renzo Piano to finalise the design of One Sydney Harbour and continue to receive a high volume of enquiry for the apartments," he said. The low-rise apartments at Barangaroo South sold out in hours in 2013 and the Sydney housing market has only got hotter since then. Some of the units have resold for as much as 30 per cent premiums. "The Anadara and Alexander waterfront apartments at Barangaroo South were highly anticipated by local and international buyers, with all 159 residences selling out within 3½ hours of market release," Mr Wilson said. "Some have been resold which points to factors such as a strong property market, favourable economic conditions and buyer confidence in the long-term demand for Barangaroo's location and lifestyle." Mr Wilson said buyers would have another chance to live at Barangaroo when Lend Lease launches One Sydney Harbour by Renzo Piano in late 2015 to early 2016. Given the continuing heat in the Sydney market driving up prices, the units at One Sydney Harbour - many of which will have views of the Harbour Bridge and Opera House - are expected to sell for significantly more than at Anadara and Alexander. The towers will be 250 metres, 210 metres and 107 metres high. Lend Lease hopes to have approvals for the towers finalised by the end of the year so it can start selling. Fairfax Media Management Pty Limited Document AFNR000020150701eb720001d
14-07-2015, 11:14 PM
NSW strata law change to boost housing supply
THE AUSTRALIAN JULY 15, 2015 12:00AM Samantha Hutchinson Property Writer Fair Trading Minister Victor Dominello says the reforms “will reinvigorate NSW”. Picture: David Swift. Source: News Corp Australia NSW is in line for a sizeable boost to its housing supply with the introduction of new strata laws that will make it easier to sell or convert strata titles. A long-awaited strata reform package has proposed more than 90 changes to the legislation, with a key change that lowers the level of consent needed to make changes to rules that govern a building and how it is run. In two draft bills put forward to the state parliament today, body corporates will only need agreement from 75 per cent of strata owners before changes to titles can occur, down from a previous requirement for 100 per cent agreement. The new rule will make it a lot easier for building owners to make decisions about everything from parking to passive smoking rules. But policy makers anticipate the new rule will trigger a swag of buildings to hit the market as potential residential development sites. “These reforms will reinvigorate NSW through an increase in housing supply and a stronger construction industry,” Fair Trading Minister Victor Dominello told The Australian. “By 2040, about half of Sydneysiders will be living in strata. The proposed reforms are reflective of present needs and future demands”. The changes are long overdue, according to the industry. “There is little argument that there is a need to change the way strata schemes are terminated,” Corrs Chambers Westgarth partner Paul Carrick said. About 30 per cent of residential strata schemes in Sydney are 30 years old. State land and property titles revealed that only 826 schemes had been terminated since the legislation was enacted — a fraction of the 70,000 schemes in NSW. “The main reason so few strata schemes have been terminated is because of the difficult process required to terminate a strata scheme,” Mr Carrick said. “It is difficult to obtain a unanimous resolution of the owners corporation ... particularly in large strata schemes where there may exist many competing individual interests.” It’s a struggle strata owners in Sydney’s Hudson House know well. The Macquarie Street landmark, with owners including Phillip Wolanksi, the Thai Embassy and The Australian Hotels Association, has been at the centre of a standoff between owners who want the office tower to be sold as a residential development site and those who don’t. Owners of more than 11 of the 17 storeys have been battling since 2013 to secure residential approval for their floors, with a view to sell the building as a residential development site. In April, they appointed CBRE agents Nick Heaton and Josh Cullen to sell their cumulative holdings with a price tag of more than $120 million, even as a handful of owners stood firm on their office holdings. Under the new scheme, these objections would be overruled because more than 75 per cent of owners were in favour. The draft bills are open for feedback until August 12, with final bills to be introduced to parliament later this year. |
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