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(28-11-2014, 09:29 AM)newbie11 Wrote: [ -> ]

(28-11-2014, 12:44 AM)BlueKelah Wrote: [ -> ]"The committee report, tabled by chairwoman Kelly O’Dwyer, shows these fines would also be applied to real estate agents, accountants, lawyers and conveyancers that knowingly assist in illegal purchases, exposing them to hefty penalties in the event of getting caught. And any capital gains from properties that are found to be illegally bought and undergo a compulsory sale would be retained by the government, under the recommendations."

Looks like this will be the trigger for aus prop to start going down. Don't think any foreign buyer home purchases can be done, now that local professionals will be involved as well, they would require all overseas buyers to get FIRB approval first. And FIRB with an influx of applications will take a long time to approve.

aussie gov is all talk most of the time, until they run out of money then they will start policies to "extract" money from the system. Capital gains retained by government should be helpful with the billion dollar hole in the budget which the treasurer is now trying to plug.

Now let's see what treasurer Joe Hockey will do.

Don't understand what you meant. Local parties are engaged by foreign purchasers. Firb approval is always a condition prior to settlement of contract. Don't see an impact or whatsoever. . Though there always will be the very minority that try to game or fraud the system but these people are surely not just foreigners

Analysts split over effect on developers

Samantha Hutchinson
483 words
29 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Analysts are divided on the impact that changes proposed by a federal government report into offshore property ­purchases will have on Australia's biggest residential developers.

Minister Kelly O'Dwyer and a House of Representatives Economics Standing Committee have proposed to strengthen the administration of laws governing overseas buyers in Australian real estate.

More emphasis on oversight will boost compliance in the sector, Ms O'Dwyer argued, after years of haphazard administration and no enforcement orders since 2006.

But some analysts argue that non-compliance within the current framework is likely to be low, and for this reason, any impact the report has on the country's biggest residential developers will only be limited.

"We do not expect [these changes] to have a significant impact on residential markets or the residential developers, Stockland Property Group or Mirvac," Citi analyst Philip Cheetham said.

"Capital preservation is a big driving factor and we think that's likely to have encouraged compliance over the past years," he added.

"I'm a big believer that people act in their personal interest . . . if you've spent your life accumulating capital, the last thing you want to do is to potentially lose it by not obeying the rules and laws."

Other analysts argue non-compliance is likely to be high, and the report's impact on apartment developers will be more pronounced with more buyers forced into buying new property.

"There's been no enforcement, and we think there's been a fair bit of overspill in that people are buying existing homes when they really should only be buying new homes," one analyst said, who preferred to go unnamed.

"If anything, I think these new rules could funnel buyers into new property because they've got no option to buy older homes, and that could be a great thing for a group like Mirvac or Lend Lease."

Mr Cheetham believes that if non-compliances is a serious problem, better enforcement of the rules may lead to weakness in house prices, due to the fact an existing buyer group is no longer an active participant, he reasoned.

"This in turn could impact the new dwellings segment of the market by way of a reference point in pricing," he said, adding: "We think the risk of this is low."

Mr Cheetham noted the paucity of data surrounding the buying trends of offshore buyers, and the difficulty in calculating the impact of proposals, but argued that risks were weighted toward the established housing market.

"If non-compliant investment IS material, we think it's more likely to be in the established housing market than new dwellings (given the lack of restrictions on new dwellings) hence . . . we see the risk as being predominantly in the established housing market" he added.

Key points Changes to legal administration proposed. Emphasis on oversight to boost compliance.


Fairfax Media Management Pty Limited

Document AFNR000020141128eabt0000q

Property to remain mainstay of nation’s resources for years to come
PHIL RUTHVEN THE AUSTRALIAN DECEMBER 01, 2014 12:00AM

Phil Ruthven on a Shaping Our Future panel at the Sydney Opera House. Source: News Corp Australia

PROPERTY in Australia will pass the $9 trillion mark by the end of this fiscal year in June 2015.

We love property, as most ­people in most countries do; and have often fought for over many millenniums. Property means many things to people: freedom; safety & security; prestige; belongingness; happiness; jobs; wealth creation; rental income; and more.

It dominates Australia’s total assets of $12.8 trillion (66.2 per cent) and has done so for a very long time, although the dominance was higher 10 years ago in 2004 (71.6 per cent). The first exhibit puts property and its broad segments in perspective within the nation’s total resources over the past two decades.

Clearly residential property, nearing 10 million dwellings (not all inhabited), has the major share of property in value as well as number terms. Its value is currently over $5.6 trillion, some 64 per cent of all property. Other property consists of commercial & industrial property, rural property and infrastructure (airports, ports, roads & bridges, utilities and more), and is valued at $3.2 trillion.

The value of all residential property has increased by 5 per cent a year over the past five years, just pipped by all other types of property at 5.7 per cent a year.

It may be of surprise to find our natural resources valued at less than a tenth (9.2 per cent) of the total as of June 2014, such has been the visibility of the current mining boom, our sixth since 1788, but this time being progressively dominated by energy minerals (gas, oil, coal and uranium) as the cycle ­peters out in the 2030s. That said, just 10 years ago in 2004, minerals accounted for a mere 3.3 per cent of all resources; and that share may well return in a few decades time as this cycle runs its course.

Machinery & equipment has eased from 6 per cent of total resources to 5 per cent over the past 10 years, an indication of the declining relative importance of industrial age industries and the cheaper IT equipment in the new age of service industries.

Disappointingly, Intellectual Property & Intangibles have remained at a lowly 1.7 per cent of total resources; not a good sign for an economy that needs to become a cleverer one in the competitive world of this new century and especially in the Asian mega-region.

The dominance of residential property — 43 per cent of total resources of $12.8 trillion — is evident in this second exhibit.

Dwellings are even more important in the household wealth stakes, representing 54.5 per cent of the $9.9 trillion total of the 9.3 million households. However, if household liabilities in the form of mortgages and other indebtedness are netted out, then dwellings retreat to 45.5 per cent of the total net worth of households of $7.9 trillion. Interestingly, financial assets are just overtaking the importance of dwellings in the net worth equation.

However, residential property prices continue to grow, especially in capital and large coastal cities. The growth in prices in the capital cities has been 4.6 per cent a year over the past five years and 5.3 per cent over the past 10 years. This growth has worried the RBA and overseas financial analysts.

For most of the post WWII years, dwellings were around 2¾ times household incomes, now 3½ times, having been as high as nearly four times just a few years ago.

So what are the big changes taking place in property? A lot.

Property is likely to remain the mainstay of the value of the nation’s resources for a very long time. Our land of 7.7 million square kilometres is close in size to China (9.6 million square kilometres) and well over the 3.3 million square kilometres of India, both having populations over 50 times ours. We are currently growing faster than the world’s population — 1.5 per cent a year versus 1.3 per cent — and are likely to do so for much of the future largely due to immigration; leading to growing land value and overall property values. The rapidly increasing wealth of the region is already being experienced in foreign ownership of property, especially rural and residential property.

Infrastructure property has long ago overtaken the value of rural property, and is poised to exceed all commercial and industrial property; such are the needs of a far-flung continent needing to be modern, closer and accessible.

And ownership? Cleary, home ownership is slowly reducing in favour of leasing and renting. This is partly due to affordability, but also to increasing financial literacy and lifestyle preferences. The same pattern has been more evident in the business world, which has been shedding hard/passive assets (property & equipment) in favour of leasing, factoring, outsourcing functions and IP, which easily outstrips property returns. So we can expect a lot more growth in property ownership.

Phil Ruthven is the chairman of IBISWorld.

House prices ease as supply grows, demand cools
THE AUSTRALIAN DECEMBER 01, 2014 12:56PM

Kylar Loussikian

Journalist
Sydney

Housing passes the peak

HOME prices have recorded their first slowdown in six months, with Melbourne leading a fall that could ease pressure on calls to introduce measures to cool the housing market.

Home values fell 0.3 per cent across capital cities for November, although year-on-year growth remains positive, at 8.5 per cent.

CommSec’s chief economist Craig James said the fall was a result of supply picking up and demand tapering off “in line with higher prices”.

“The market is correcting itself off its own accord, which suggests there’s no need for the Reserve Bank to intervene with so-called macroprudential controls,” he said.

Melbourne recorded the biggest monthly fall, down 2.6 per cent. Home values in Sydney and Perth rose 1 per cent and 0.9 per cent respectively, the largest rises. Brisbane and Hobart recorded smaller rises, with all other cities down.

The strong growth in home values has almost entirely been caused by a booming market in Sydney and Melbourne. Home values in Sydney have increased by 13.2 per cent for the past 12 months, according to the CoreLogic figures.

“Four markets were higher, four were lower, so there hardly seems to be a uniform boom,” Mr James said.

“Home prices will continue to ease off to more sustainable levels, and we’re going to see a substantial easing of capital growth in Sydney as some of the new apartments come on to the market.”

CoreLogic research analyst Cameron Kusher said home value growth had peaked in April, when year-on-year growth hit 11.5 per cent.

Mr Kusher said all capitals had now past their cyclic peak.

“Market indicators such as auction clearance rates remain quite strong, but also point to slightly weaker overall housing market conditions,” Mr Kusher said, noting the total number of property listings had also started to trend higher.

“This may indicate a slower rate of sale and is indicative of mounting stock on the market.”

But inner-city Melbourne agent Tom Roberts, of Nelson Alexander, remains optimistic.

“From our point of view, our area hasn’t appeared to slow down. We’re in the city and that’s remained strong,” he said.

“I’ve certainly seen the figures that point to price growth slowing, but those broadbrush numbers don’t take into account some areas are slowing and some are not.”

Australian Housing Outlook 2014 – 2017
Prepared by BIS Shrapnel for QBE
October 2014

http://www.qbelmi.com/Uploads/Documents/...5f7703.pdf

Thought I'll repost here for follow-ups and answer here instead of being too OT in St****** thread

(28-11-2014, 11:35 AM)specuvestor Wrote: [ -> ]AUD depreciation is good for those not yet vested... but not so wonderful for those vested.

So the key is of course whether foreigners will be continually buying if govt is going to make it harder for them soon. Then it will become a matter of whether these hot money thinks there are any more upside when prices stagnate and demand wanes. Sounds familiar? Australia only has 23m population... foreign demand will be big swing to the demand equation.

I won't be refuting the opinion piece. We will be talking about history soon Property cycles are very well understood because of the long lag time for supply to meet demand and in the period in between demand spikes even more in a vicious cycle as players are very herd instinct. Coupled that with hot money and you have a potent cocktail.

I never understood why countries even bothered to let foreigners own properties in the first place when land/ properties is one of the most vital factor of production.

PS this is not an opinion about SL which GG has done a very good job analysing it but the macro factors affecting the sector. Of course we can be both right AND wrong simply due to the time horizon that we are considering.

(28-11-2014, 11:47 AM)specuvestor Wrote: [ -> ]If you have read my posts carefully ... I'm not comparing with just Singapore. That's too shallow We are about the same age... we've seen so many boom and busts in the REGION. Why would this time be different for Australia with rising unemployment, declining commodity prices and economy boosted by housing FDI which is unsustainable?

You have yet to say why China and US can't be different also?

The property cycles are very well understood. So much so that the smart and hot money are able to twirl it around with their fingers, and leave the locals to groan and the populist and academic driven governments flabbergusted. Properties do not make people rich. It is the cheap leverage and the herd instinct.

(28-11-2014, 12:26 PM)greengiraffe Wrote: [ -> ]China is a Communist country, the rules are not clear so I refrain for making my comments - I will only take Chinese trend from Temasek's track record... luckily there is still a proven track record...

As for US, based on my limited historical experience - it was the lack of accountability in terms of borrowers' responsibilities (lack of foreclosure rules ) coupled with financial creativity that led to the GFC.

Anyway, US has learnt their lesson and US is too far away from me in terms of property, hence apart from following the news occasionally, I will reserve my comments.

As far as I m concerned, I m only interested in learning things within my own capability and not to be overstretched so that I will not look stupid knowing too little of too many things.

GG

In short, GG you are saying This Time Is Different for Australia because it is so unique and hence very different from the rest of the property bubbles. I see similar lack of accountability like in Firb, or financial creativity like interest-only-loans?

Really something new under the sun?

As Buffett aptly put it: you don't have to be a farmer to understand farming stocks. You just need to understand the business. As far as I can see the Australian Property business is peaking out. Bearing in mind that Chaoren bought into FNN at the high as well so his timing on Australand is interesting. However his capability to strip assets is not dissimilar to Lippo group, which you had been advocating a study yet can't draw the parrallel.

Neither are all S-chips bad with a single brush... we just need to do some work to understand the business else "will look stupid knowing too little", like your oft quoted CMH.

Like I said this differing in view is not going to take too long to resolve

(30-11-2014, 11:01 PM)greengiraffe Wrote: [ -> ]Property to remain mainstay of nation’s resources for years to come
PHIL RUTHVEN THE AUSTRALIAN DECEMBER 01, 2014 12:00AM

Phil Ruthven on a Shaping Our Future panel at the Sydney Opera House. Source: News Corp Australia

PROPERTY in Australia will pass the $9 trillion mark by the end of this fiscal year in June 2015.

We love property, as most ­people in most countries do; and have often fought for over many millenniums. Property means many things to people: freedom; safety & security; prestige; belongingness; happiness; jobs; wealth creation; rental income; and more.

It dominates Australia’s total assets of $12.8 trillion (66.2 per cent) and has done so for a very long time, although the dominance was higher 10 years ago in 2004 (71.6 per cent). The first exhibit puts property and its broad segments in perspective within the nation’s total resources over the past two decades.

Clearly residential property, nearing 10 million dwellings (not all inhabited), has the major share of property in value as well as number terms. Its value is currently over $5.6 trillion, some 64 per cent of all property. Other property consists of commercial & industrial property, rural property and infrastructure (airports, ports, roads & bridges, utilities and more), and is valued at $3.2 trillion.

The value of all residential property has increased by 5 per cent a year over the past five years, just pipped by all other types of property at 5.7 per cent a year.

It may be of surprise to find our natural resources valued at less than a tenth (9.2 per cent) of the total as of June 2014, such has been the visibility of the current mining boom, our sixth since 1788, but this time being progressively dominated by energy minerals (gas, oil, coal and uranium) as the cycle ­peters out in the 2030s. That said, just 10 years ago in 2004, minerals accounted for a mere 3.3 per cent of all resources; and that share may well return in a few decades time as this cycle runs its course.

--snip--

Property is likely to remain the mainstay of the value of the nation’s resources for a very long time. Our land of 7.7 million square kilometres is close in size to China (9.6 million square kilometres) and well over the 3.3 million square kilometres of India, both having populations over 50 times ours. We are currently growing faster than the world’s population — 1.5 per cent a year versus 1.3 per cent — and are likely to do so for much of the future largely due to immigration; leading to growing land value and overall property values. The rapidly increasing wealth of the region is already being experienced in foreign ownership of property, especially rural and residential property.

(28-11-2014, 11:38 AM)greengiraffe Wrote: [ -> ]Only time will tell if measures will be announced and being legislated... Australia is a true demoCRAZY and not a single party ruled PAP regime...

U made it sounded all too familiar with your Singapore experience that I have time and again said that must never be extrapolated to a totally different system.

23m is certainly bigger than 6m and with more foreigner focus, 23 m is a conservative figure...

Sounds like Goh CK in 1996. Unless it is freehold, properties are prepaid expenses, that's why property is part of CPI. Issue is everyone is affected by this expense and when they think cost is going up, everyone wants to lock in their cost, and speculators wants to frontrun the rest.

That's where the herd instinct comes from. Not so dissimilar to the Hello Kitty craze.

As value investor we should know that expense is not inherently wrong if they can increase incremental income or value. Property bubble does neither except for the wealth effect.

I'm also wondering if Australia is willing to have a Chinese or Indian as a Prime Minister. When one simply looks at a single facet, conclusion is simplistic

Different or not I dunno and perhaps to lazy to try and speculate on what policy makers will formulate...

This is one part of investments alongside commodities and fx trend that I have no competence in.

So when it comes to all this dynamics, I simply look at where the crowd is heading and make a judgement. So long as I deemed the bubble is not too big and companies that I m vested in remain fundamentally sound, lack of bubbles, I m ok and answerable to my stake holders.

I never trusted any political consters. I have more faith in GODfathers since they have more vested interests to look after themselves and hence my small interests.

I m a simpleton, I hope to make small consistent $ and hence I can't find enough time to help solve bigger problems which are consistently rolled over over a prolonged period of time...

Sorry... didn't give you any views since there are more than enough consultant views and noise. My views are irrelevant since I m most of the time an old unappreciated recorder.

GG

(01-12-2014, 01:07 PM)specuvestor Wrote: [ -> ]Thought I'll repost here for follow-ups and answer here instead of being too OT in St****** thread

(28-11-2014, 11:35 AM)specuvestor Wrote: [ -> ]AUD depreciation is good for those not yet vested... but not so wonderful for those vested.

So the key is of course whether foreigners will be continually buying if govt is going to make it harder for them soon. Then it will become a matter of whether these hot money thinks there are any more upside when prices stagnate and demand wanes. Sounds familiar? Australia only has 23m population... foreign demand will be big swing to the demand equation.

I won't be refuting the opinion piece. We will be talking about history soon Property cycles are very well understood because of the long lag time for supply to meet demand and in the period in between demand spikes even more in a vicious cycle as players are very herd instinct. Coupled that with hot money and you have a potent cocktail.

I never understood why countries even bothered to let foreigners own properties in the first place when land/ properties is one of the most vital factor of production.

PS this is not an opinion about SL which GG has done a very good job analysing it but the macro factors affecting the sector. Of course we can be both right AND wrong simply due to the time horizon that we are considering.

(28-11-2014, 11:47 AM)specuvestor Wrote: [ -> ]If you have read my posts carefully ... I'm not comparing with just Singapore. That's too shallow We are about the same age... we've seen so many boom and busts in the REGION. Why would this time be different for Australia with rising unemployment, declining commodity prices and economy boosted by housing FDI which is unsustainable?

You have yet to say why China and US can't be different also?

The property cycles are very well understood. So much so that the smart and hot money are able to twirl it around with their fingers, and leave the locals to groan and the populist and academic driven governments flabbergusted. Properties do not make people rich. It is the cheap leverage and the herd instinct.

(28-11-2014, 12:26 PM)greengiraffe Wrote: [ -> ]China is a Communist country, the rules are not clear so I refrain for making my comments - I will only take Chinese trend from Temasek's track record... luckily there is still a proven track record...

As for US, based on my limited historical experience - it was the lack of accountability in terms of borrowers' responsibilities (lack of foreclosure rules ) coupled with financial creativity that led to the GFC.

Anyway, US has learnt their lesson and US is too far away from me in terms of property, hence apart from following the news occasionally, I will reserve my comments.

As far as I m concerned, I m only interested in learning things within my own capability and not to be overstretched so that I will not look stupid knowing too little of too many things.

GG

In short, GG you are saying This Time Is Different for Australia because it is so unique and hence very different from the rest of the property bubbles. I see similar lack of accountability like in Firb, or financial creativity like interest-only-loans?

Really something new under the sun?

As Buffett aptly put it: you don't have to be a farmer to understand farming stocks. You just need to understand the business. As far as I can see the Australian Property business is peaking out. Bearing in mind that Chaoren bought into FNN at the high as well so his timing on Australand is interesting. However his capability to strip assets is not dissimilar to Lippo group, which you had been advocating a study yet can't draw the parrallel.

Neither are all S-chips bad with a single brush... we just need to do some work to understand the business else "will look stupid knowing too little", like your oft quoted CMH.

Like I said this differing in view is not going to take too long to resolve

(30-11-2014, 11:01 PM)greengiraffe Wrote: [ -> ]Property to remain mainstay of nation’s resources for years to come
PHIL RUTHVEN THE AUSTRALIAN DECEMBER 01, 2014 12:00AM

Phil Ruthven on a Shaping Our Future panel at the Sydney Opera House. Source: News Corp Australia

PROPERTY in Australia will pass the $9 trillion mark by the end of this fiscal year in June 2015.

We love property, as most ­people in most countries do; and have often fought for over many millenniums. Property means many things to people: freedom; safety & security; prestige; belongingness; happiness; jobs; wealth creation; rental income; and more.

It dominates Australia’s total assets of $12.8 trillion (66.2 per cent) and has done so for a very long time, although the dominance was higher 10 years ago in 2004 (71.6 per cent). The first exhibit puts property and its broad segments in perspective within the nation’s total resources over the past two decades.

Clearly residential property, nearing 10 million dwellings (not all inhabited), has the major share of property in value as well as number terms. Its value is currently over $5.6 trillion, some 64 per cent of all property. Other property consists of commercial & industrial property, rural property and infrastructure (airports, ports, roads & bridges, utilities and more), and is valued at $3.2 trillion.

The value of all residential property has increased by 5 per cent a year over the past five years, just pipped by all other types of property at 5.7 per cent a year.

It may be of surprise to find our natural resources valued at less than a tenth (9.2 per cent) of the total as of June 2014, such has been the visibility of the current mining boom, our sixth since 1788, but this time being progressively dominated by energy minerals (gas, oil, coal and uranium) as the cycle ­peters out in the 2030s. That said, just 10 years ago in 2004, minerals accounted for a mere 3.3 per cent of all resources; and that share may well return in a few decades time as this cycle runs its course.

--snip--

Property is likely to remain the mainstay of the value of the nation’s resources for a very long time. Our land of 7.7 million square kilometres is close in size to China (9.6 million square kilometres) and well over the 3.3 million square kilometres of India, both having populations over 50 times ours. We are currently growing faster than the world’s population — 1.5 per cent a year versus 1.3 per cent — and are likely to do so for much of the future largely due to immigration; leading to growing land value and overall property values. The rapidly increasing wealth of the region is already being experienced in foreign ownership of property, especially rural and residential property.

(28-11-2014, 11:38 AM)greengiraffe Wrote: [ -> ]Only time will tell if measures will be announced and being legislated... Australia is a true demoCRAZY and not a single party ruled PAP regime...

U made it sounded all too familiar with your Singapore experience that I have time and again said that must never be extrapolated to a totally different system.

23m is certainly bigger than 6m and with more foreigner focus, 23 m is a conservative figure...

Sounds like Goh CK in 1996. Unless it is freehold, properties are prepaid expenses, that's why property is part of CPI. Issue is everyone is affected by this expense and when they think cost is going up, everyone wants to lock in their cost, and speculators wants to frontrun the rest.

That's where the herd instinct comes from. Not so dissimilar to the Hello Kitty craze.

As value investor we should know that expense is not inherently wrong if they can increase incremental income or value. Property bubble does neither except for the wealth effect.

I'm also wondering if Australia is willing to have a Chinese or Indian as a Prime Minister. When one simply looks at a single facet, conclusion is simplistic

Melbourne auction market falls as clearance rate dips below 70%
"For the first time since July 2013, there have been two consecutive weekends with clearance rates below 70 per cent.

There are now clear indications of a sustained fall in buyer activity over late spring.

The weekend's result of 67.2 per cent was almost identical to last weekend's year-low result of 67.1 per cent."

"Although rates are likely to remain on hold, economic conditions continue to point to a downward bias next year if a sustained improvement doesn't materialise. Unemployment is at decade-high levels, building approvals are flattening, and the dollar remains relatively high. And housing market activity is also flattening with house price growth in Melbourne this year struggling to meet the inflation rate. "

Read more here

Flood of empty flats fuels property hoarding fears
The property hoarding bug has hit Australian cities with reports that as many as 25 per cent of apartments in Melbourne's Docklands are permanently unoccupied.

Earlier this month it was claimed that almost 500 apartments in Melbourne's Docklands consumed no water last year while another 290 used less than 50 litres of water a day – the equivalent of a leaky tap – leading to assumptions that they were empty or rarely used.

Tax-reform group Prosper Australia, which commissioned the Speculative Vacancies study, claims figures across the Victorian capital point to a rental vacancy rate of more than 7 per cent rather than the official figure of just over 3 percent because these homes are not listed as being available for rent.

The "buy and leave" syndrome, where investors would rather leave new apartments empty than rent them out – either with a view to future occupancy of a pristine unit or to accrue capital gain – has affected many world cities including London and Hong Kong.

Regulations came into force in Victoria just last month allowing owners corporations (bodies corporate) to pursue overseas bad strata debts through the state's Civil Administration Tribunal, rather than the Supreme Court, as previously.
Read more here

---------------------

Locals have voted in the latest Victorian elections and rules are very likely to be put into play this time round.

First-home buyer numbers hit record low
THE AUSTRALIAN DECEMBER 04, 2014 12:00AM

Michael Bennet

Reporter
Sydney

THE crisis facing first-home buyers in Sydney and Melbourne’s hot housing markets is showing no signs of letting up, with a major mortgage broker revealing newcomer numbers have slumped to a record low in NSW.

As debate rages over the accuracy of data on first-home buyers, mortgage brokers AFG yesterday said they made up fewer than one in 50 new borrowers, or 1.9 per cent, in NSW last month.

AFG’s tally also fell to record lows in Victoria and South Australia. However, confirming the variability across the country, first-home buyers rose in Queensland to 5.2 per cent and 19.1 per cent in Western Australia.

Regulators are concerned about concentration risks in Sydney, and to a lesser extent Melbourne, and AFG’s data is unlikely to ease their worries, with home loans to investors in NSW at 50.9 per cent of flows last month.

That aligns with official data showing investor lending up 10 per cent in the past year, the strongest in more than six years, which may prompt regulators to install rules on banks to cool the more speculative end of the market.

But there have been queries surrounding the flows, with Macquarie analysts arguing many first-home buyers were purchasing affordable investment properties, thus showing up as investors.

Deutsche Bank strategist Tim Baker said parents might be signing for loans on behalf of their children. He, however, said confidence was low amid soft employment and wages growth and new buyers missing out on rising asset prices in recent years.

He said this could be seen because buying was relatively cheap to renting compared with the past 25 years and saving for a deposit still took about a year’s income.

AFG pointed the finger at the axing of first-home buyer grants in most states except WA.

Country Garden eyes city development sites
THE AUSTRALIAN DECEMBER 04, 2014 12:00AM
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Greg Brown

Property Reporter
Sydney
Country Garden eyes city sites
Country Garden Australia chief executive Johnson Zhang. Source: News Corp Australia
HONG Kong-listed development giant Country Garden aims to buy three development sites next year as it continues talks to buy Harry Triguboff’s Meriton empire.

Country Garden Australia chief executive Johnson Zhang said that the group was looking at sites in Sydney, Melbourne and Brisbane.

He said it was still in talks with Mr Triguboff. But he would not be drawn on whether the Sydney billionaire’s proclaimed $10 billion price tag was too hefty. “We still need to talk further (with Meriton),” Mr Zhang said. The Australian first revealed the Country Garden/Meriton talks in June.

Mr Zhang was not perturbed by figures this week showing the residential market was slowing. Home prices in Melbourne fell more than 2.5 per cent in November, according to researcher CoreLogic RP Data.

He had expected prices would wane, making it easier to buy sites. “(Home price declines) shouldn’t be bad news for Country Garden because when the residential prices go down that means the land price goes down as well,” Mr Zhang said.

“We were recently in Melbourne (looking at sites) for this reason.”

But he said there was an oversupply of apartments in Melbourne and that the planning authorities were too bullish in approving the construction of new inner city projects.

“Melbourne has too many apartments,” Mr Zhang said.

“There are a lot of projects especially around the CBD and it has gone too far.”

Country Garden, which is ranked 633 on the Forbes Global 2000 list, was founded in 1992 and listed on the Hong Kong stock exchange in 2007.

It is controlled by China’s richest woman, Yang Huiyan, a 32-year-old property heiress with a fortune of $7.2bn.

The group entered the Australian market this year through the launch of a $500 million apartment project in Sydney’s northwest.

Mr Zhang said that the newly minted free trade agreement between Australia and China would buoy interest in Australian property from mainland China.

He said that the wave of Chinese groups entering Australia — such as Dalian Wanda Group and China Poly Group — was due to the better performance of Australia’s property market compared with residential markets in China.