Australia Property

[specuvestor]

http://www.valuebuddies.com/thread-4824-...l#pid95351

http://www.valuebuddies.com/thread-4912-...l#pid95333

http://www.valuebuddies.com/thread-4912-...l#pid95335

http://www.valuebuddies.com/thread-4912-...l#pid95336

"Figures from the Reserve Bank show that while households are carrying more debt than ever compared with their incomes, house prices are rising more rapidly."

I assume this is a joke. Housing bubbles are not unprecedented. People should seriously study history

Now we look at interest payments as % of income instead of mortgage payment. Deja vu

Growing out of debt from income or GDP growth which is productive is very different from non productive capital appreciation expectation.

Be assured that i read your informative posts

As sure as I am that Bitcoin is a bubble and China property will deflate just as US or Spain, this time will not be different for the lucky nation as well

In fact my guesstimate is that we probably will have a conclusion in next 18 months if RBA wants to remain credible. And i wont be surprised if AUD reach parity with SGD

[greengiraffe]

http://www.valuebuddies.com/thread-4824-...l#pid95351

http://www.valuebuddies.com/thread-4912-...l#pid95333

http://www.valuebuddies.com/thread-4912-...l#pid95335

http://www.valuebuddies.com/thread-4912-...l#pid95336

"Figures from the Reserve Bank show that while households are carrying more debt than ever compared with their incomes, house prices are rising more rapidly."

I assume this is a joke. Housing bubbles are not unprecedented. People should seriously study history

Now we look at interest payments as % of income instead of mortgage payment. Deja vu

Growing out of debt from income or GDP growth which is productive is very different from non productive capital appreciation expectation.

Be assured that i read your informative posts

As sure as I am that Bitcoin is a bubble and China property will deflate just as US or Spain, this time will not be different for the lucky nation as well

In fact my guesstimate is that we probably will have a conclusion in next 18 months if RBA wants to remain credible. And i wont be surprised if AUD reach parity with SGD

Mate,

A$ weakness is forgone conclusion as to whether parity will be reached its anyone's call. Singapore's economic outlook is as tough as anyone else.

RBA will remain credible but as with other CBankers behind the curve...

Its the tide of foreign $ whose impact can never be ascertained.

GG

[specuvestor]

Singapore and Aussie monetary policies are very different. singapore currency is not solely determined by GDP and Aussie is importer of capital

You should be the best person to know the diff between these 2

[BlueKelah]

When China goes down, aussie will go down. Aussie banks now give up to 97% LVR. So a deposit of 50k will get more than 1 million loan. Easy credit is pushing up prices. Once banks tighten back to 20% deposit again, we will see lotsa naked swimmers

Rejoice, parity with sgd is inevitable. Iron ore miners are just gonna hammer out as much volume as they can. You guys can go aus for holiday liao


via Xperia Z1 with Android 4.4.4 running tapatalk.

[greengiraffe]

House prices flatten in September: report
AAP SEPTEMBER 29, 2014 5:15PM

House prices flattened in September after the strongest winter gains in seven years.

A daily home value index for mainland state capitals compiled by RP Data and CoreLogic was down 0.3 per cent in the first 26 days of September, compared with the average for all of August.

But the trend picked up late in the month, making a "relatively flat" result likely for the month as whole, RP Data research director Tim Lawless said.

"The first month of spring has seen housing market conditions remain buoyant with clearance rates consistently above the 70 per cent mark on a weighted capital city basis and agents continuing to report strong housing market activity," he said.

"From a valuations perspective we have seen a flattening in the rate of capital gains over the month of September."

The September result would bring the three-monthly growth rate for prices back to about 2.5 per cent, a "healthy reduction" from growth of 4.2 per cent over the three months to August, Mr Lawless said.

"With the debate around sustainability of dwelling values heating up, the softer September result should be viewed as a welcome evolution in the housing market, although it remains to be seen whether these softer conditions will persist throughout the rest of Spring."

The final figures for September, which will include data for smaller capitals and regional areas, are due for release on Wednesday.

[greengiraffe]

Walker, Cbus alert to Asian capital surge

Matthew Cranston, Nick Lenaghan and Robert Harley
874 words
30 Sep 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

One of Australia's most successful property developers, billionaire Lang Walker, has questioned the prices being paid by Asian groups for ­residential developments sites around the country.

In the past two years dozens of Asia-based developers such as Greenland, R&F Properties, ­Fragrance, Aspial and UEM Sunrise, have spent at least $2.7 billion buying residential development sites around the country according to property consultancy firm Deep End Services' conservative estimates. In the past decade they have spent $4.2 billion.

The RBA has noticed the activity saying last week that: "In recent years, foreigners, particularly from Asia, have also become more active in ­purchasing older office buildings to convert to other uses, especially apartments."

For Mr Walker, the logic behind the prices being paid is questionable.

"It is a little scary," he told The ­Australian Financial Review, "but at the end of the day I think it is just them getting money out of Asia as opposed to the fundamentals."

"I do agree with the pundits that they are paying some big prices for sites but I think maybe their drivers are different to ours."

The national average price being paid for a site by an offshore investor has increased from $4000 per square metre in 2009 to about $18,000 per square metre in 2014.

Fragrance Group bought 555 King Street, Melbourne, in June this year for $78 million or about $34,800 per square metre. According to Charter Keck Cramer the Melbourne mean price for central business district land at June was nearing $25,000. In ­Brisbane, local developer Metro ­Property Group more than doubled their money on a site in less than a year selling to Chinese group R&F Properties for $46 million.

A spokesman for Greenland said he didn't think the prices were that high.

"I don't think we are buying sites at higher prices – I think that is just the market value," he said.

He agreed that there was a ­difference in the equity flowing out of Asia compared with that of local developers.

Another prominent developer CBus chief executive Adrian Pozzo, who has overseen the construction of multiple high-rise residential projects in Australia, is alert to the rapidly growing competition from Asia.

"In the past 12 to 18 months we have experienced strong competition for development sites from offshore investors which has put some pressure on pricing, potentially resulting in some developments not being feasible," Mr Pozzo said.

"However, where there are development opportunities that 'come' to market and fit within our strategy, it won't matter who we are competing against, we will always put our best foot forward."

His comments come after ANZ's head of commercial property, Eddie Law, said banks must carefully monitor the "logic" of new ­offshore-backed site purchases and developments.

"Chinese equity competes in its own framework against local equity. It has a propensity to pay a higher price, particularly for development sites, and the jury is out as to the logic attached to that at the moment," Mr Law said this week.

The development pipeline for offshore-backed developers has risen 37 per cent in the past 12 months according to Deep End Services.Part of a global trend

CBRE's global president of ­capital markets, Chris Ludeman told the Financial Review that Chinese investors were outpacing local developers in core markets around the world, not just Australia.

CBRE was involved in Greenland's 70 per cent investment in the 8-hectare Atlantic Yards project in Brooklyn, which at $US4 billion ($4.6 billion) is the largest Chinese-backed development project in the country. CBRE is also negotiating with Chinese developers on sites in Vancouver, on a $400 million project in Beverley Hills and on "a lot of other deals pending."

"We fail to recognise that their customers are not the traditional, local buyers. They are catering to their customers in China. On relative value it may feel cheap."

Charter Keck Cramer director of research Robert Papaleo agrees that the Chinese motives are different.

"The offshore developers are coming in with alternative ways of measuring value reflective of lower cost of capital and a bigger pool of prospective customers.

"They have lower return expectations because of the difficulty in securing opportunities in their own home market."

Analysts at Deep End Services estimates that offshore developers have a 22 per cent market share in the ­Sydney metropolitan apartment market, 33 per cent share in Melbourne and an average 17 per cent share nationally.

Out of the offshore developers, Chinese developers represent 48 per cent – the largest share of all offshore developers by apartment numbers in Australia.

Deep End Services principal Kevin Stanley said offshore developers paying higher prices was now "generally accepted" but that such a situation would have consequences.

"It changes the dynamics of the market. Local developers have reacted by moving to other areas of the market like city fringe and that then puts them into a new area of risk," he said.

The new area of risk comes from the fringe areas being less attractive destinations for people to want to buy and live in.


Fairfax Media Management Pty Limited

Document AFNR000020140929ea9u0002o

[greengiraffe]

LJ Hooker chairman Greg Paramor says housing sector is cooling
PUBLISHED: 29 SEP 2014 05:20:00 | UPDATED: 29 SEP 2014 06:34:41

JEMIMA WHYTE, JACOB GREBER AND MERCEDES RUEHL
LJ Hooker chairman and property identity Greg Paramor has warned regulators the heat may already be coming out of the housing market, as a debate escalates about whether tighter lending restrictions are necessary.

“Any macroprudential interference would probably put a dampener on local buyers, first home buyers, and that’s something we want to avoid again,” Mr Paramor told Nine’s Financial Review Sunday program.

“We’re still dealing with an ­undersupplied housing market across Australia.”

Despite high auction volumes for September, LJ Hooker has experienced a fall in listings.

“Our listings are down across the board – in Sydney around 16 per cent, across Australia 11 per cent, Mr ­Paramor said.

“That would indicate any heat is starting to go out of the market . . . It’s looking toppy in parts, but it’s certainly not uniform across Australia.”

House price growth, one the main concerns of the central bank, appears to have lost some momentum.

The RP Data CoreLogic Home Value Index for September, due to be released this week, will show home values up about 3.9 per cent in Sydney and Melbourne for the quarter.

In the three months to August, the comparable figures were 5 per cent and 6.4 per cent. Melbourne price growth markedly decelerated in ­September.

Mr Paramor noted that over the decade Sydney house prices had only risen about 3.5 per cent a year.

Ray White joint chairman Brian White said prices were not yet too great a concern – but added that macroprudential tools could be useful.

“My point [about] not letting a boom get out of control makes sense – I have seen too many booms that did get out of control, and the hangover is severe,” he said, noting the successful regulatory intervention in Asian markets.

“It’s nowhere near as toppy as we’ve seen in the past.”

Mr White said the property market had been more overpriced in Sydney in the late 1980s and late 1990s, and in 2005 it was “just raging”. “We’re not looking at a condition as extreme as 2005,” he said.

The debate comes as LJ Hooker is put up for sale. Last week The Australian Financial Review’s Street Talk reported that Lazard Australia was appointed to assist with the sale.

Mr Paramor expects the transaction to be completed by the end of the year. Selling the business however does not reflect anything about the state of the property market, he said.

“It’s not signalling anything other than it’s time for our investors to get liquidity, if they so wish,” he told the program on Sunday.

Mr Paramor indicated he would like to retain his share in the company.

He said the company had received “a lot” of inbound inquiry from offshore and domestic players.

LJ Hooker, a household name, was launched in 1928. In October 2009 it was bought by a consortium headed by Sir Leslie Hooker’s grandson, Janusz Hooker, and including rich lister John Kinghorn, Mr Paramor and, as financier, Macquarie Group.

The Australian Financial Review

[BlueKelah]

Smart move to cash out at a peak time. China's slowdown will be felt more and more soon.

via Xperia Z1 with Android 4.4.4 running tapatalk.

[greengiraffe]

Aiya, a pause is good for a longer march...

Chinese always like long march and moreover it will take a while for more of them to bring their $ out...

This middle class migration will take a long while. For Chinese developers to have taken such a serious interests in overseas properties, main thing is the backing of Chinese financial institutions since very few overseas financial institutions are willing to finance these Chinese developers whose problems in China are well documented...

An Lah Buddy, don't be so negative as Communist Chinese are not easily defeated and face is a really important issue for them especially when facing the world

GG

[greengiraffe]

Investor home loans highest since 1990
THE AUSTRALIAN SEPTEMBER 30, 2014 1:31PM

Adam Creighton

Economics Correspondent
Sydney
GROWTH in loans to investors to buy houses and apartments has accelerated to a six-and-a-half year high, fanning fears of a Reserve Bank-led crackdown on destabilising, debt-fuelled property speculation.

The value of outstanding loans to investors to buy dwellings rose 9.2 per cent over the year to August – more than three times as fast as inflation – to $471 billion, while loans to businesses rose only 3.2 per cent.

The stellar growth pushed the share of total loans in the economy that are held by housing investors to the highest level since 1990, and probably ever.

The August credit data from the Reserve Bank, released today, confirm the perverse impact of ultra-low interest rates combined with lacklustre business confidence.

They come a week after the RBA canvassed “further measures” to mitigate the stampede of investors into the Sydney and Melbourne housing markets that had caused double digit house prices increases in both cities.

Loans to investors made up almost 21 per cent of the $2.2 trillion value of total housing, business and personal loans in August, up from 18.5 per cent a decade ago and 3.3 per cent in January 1990.

Meanwhile, business credit stood at $758 billion in August and loans to owner-occupiers (which includes loans made to first home buyers) rose 5.4 per cent over the year to $919 billion.

Housing investor loans made up 33.9 per cent of the $1390 billion of outstanding housing loans, also the highest level since 1990.

Personal debt, which includes credit card debt, rose 1.1 per cent to $142 billion.