Daily Real Estate Newsletter | The Australian off-plan housing market shines red! Can the "Uncompleted Planner" retreat wholeheartedly?
Sydney's North Shore luxury property transaction records will be refreshed soon
According to reports, a sea-view luxury house in the Cremorne area on Sydney’s north shore was sold for A$2500 million. If the transaction is concluded, the transaction price record of luxury houses in the area will be refreshed. It is understood that the current owner of this ocean view mansion is Sydney businessman Carl Peterson. The mansion has a living area of up to 1000 square meters, has six bedrooms, and is equipped with many facilities such as a swimming pool. At present, the record holder for the highest price of luxury homes in Sydney's North Shore is Andrew Pridham, CEO of investment bank Moelis and former head of Melbourne Chase Investment Bank. He bought a luxury house named "Hopetoun" in Mosman for nearly A$2018 million in 2500. Bill Wavish, the former owner of Woolworths, put up for sale last year his mansion overlooking the Sydney Opera House and the Harbour Bridge for A$3500 million, but has yet to find a buyer.
Decrease in tourists and increase in guest rooms, increasing risks in the Australian hotel industry
In the past few years, driven by the booming tourism industry, the Australian hotel industry has ushered in a development boom. Recently, a report released by Deloitte showed that with the concentrated start/listing of a large number of hotel projects and the slowdown in growth of overseas tourists, the Australian hotel development industry may face the risk of imbalance between supply and demand. Relevant data shows that there are 32 new hotels under construction in Melbourne alone, and the number of new rooms will reach 6500 this year and next. Deloitte partner Adele Labine-Romain said that due to strong demand and relatively little new supply in the Sydney market, hotel occupancy rates in the area have been minimally affected. In contrast, hotel occupancy rates in Melbourne and Perth may fall below 2020% and 80% respectively in 70. Before the stock of guest rooms is digested by the market, the average price of the two places will be affected. The latest data shows that in 2018, except for India and Japan, the growth rate of tourists from other countries in Australia slowed down. It is worth mentioning that although China is still one of the top ten source countries for tourists from outside Australia, the growth rate has slowed significantly. In 2018, the growth rate of foreign tourists in Australia was only 5.5%, which was lower than the average growth rate of 14.7% in the past five years.
Australian off-plan housing customers lose 20%, increasing settlement risk
UBS analysts pointed out that for many customers who purchase off-plan properties, the current market price has fallen by as much as 20% compared to their original purchase price. Therefore, the settlement volume of off-plan housing due in the next few months is expected to decline significantly, pushing up the risk of default. Among them, those buyers who signed contracts to purchase off-plan housing projects around 2016 and 2017 have the greatest risk of default. UBS pointed out that due to the fall in house prices and the bank's tightening of the review form standards for borrowing home buyers, the trouble for buyers of off-plan settlements is not small. Many properties must be re-evaluated. The assessed value may be 20% lower than the original contract price, and the buyer must pay the difference. If the financing encounters problems, it can only be forced to sell or default. Analyst James Druce said: “From what we currently understand, the difficulty of financing apartment projects has increased and the settlement risk has increased significantly.” Among listed real estate companies, companies such as Mirvac have faced the most significant impact. Because these companies launched a large number of projects during the high market period, including the Finery project in the Waterloo area, the towers in the St Leonards area and the Olympic Park area.
ING Bank prohibits housing used as collateral for commercial loans
As housing prices fall, more and more people are falling into a state of negative equity. At the same time, the wholesale financing environment has deteriorated, and banks and other lending institutions have begun a new round of credit tightening policies. Among them, ING Bank announced that it prohibits customers from using their own houses as collateral for commercial loans. The new regulations will come into effect on March 3 (Monday). At the end of last year, ING Bank's housing loan business grew by about 18%, higher than the industry level of 9%. A spokesperson for ING Bank said: “The bank’s policy adjustments may have an impact on small business owners, such as those who wish to use their houses as mortgages to open franchise stores.” According to him, the affected businesses only account for the bank’s overall loans. A small part of the business. At the same time, the bank will continue to provide "customized" loan services to corporate customers. As market conditions change and real estate prices fall, lending institutions are tightening lending policies for small businesses and lowering their collateral valuations. Especially customers in the construction, agriculture and retail industries.
China's housing sales slow down, but housing investment growth accelerates
Although the Chinese government has stepped up its crackdown on speculation in the housing market in major cities, due to the rigid demand for housing in these areas, China’s housing investment has accelerated in the first two months of this year. The latest data released by the National Bureau of Statistics of China on March 3 (Thursday) shows that from January to February 14, the national real estate development investment was 2019 billion yuan, an increase of 1% year-on-year, and the growth rate was 2 percentage points higher than the entire year of 12090. . Among them, residential investment was 11.6 billion yuan, an increase of 2018%, and the growth rate increased by 2.1 percentage points. Residential investment accounted for 8711% of real estate development investment. However, housing transaction activities slowed down during the same period. From January to February, the sales area of commercial housing was 18.0 million square meters, down 4.6% year-on-year. Housing is a key driver of China's economic growth. However, in recent months, in the face of government restrictions on speculative investment, the real estate market has shown signs of sluggish growth, increasing market concerns about the slowing economy.