26-11-2016, 04:10 PM
Ah default lai liao for downunder apartment glut.
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Scott Morrison eases limits on foreign buyers as apartment glut looms
The federal government has announced it will make it easier for foreigners to buy new apartments amid concerns of a looming glut that will drive down prices.
Treasurer Scott Morrison said the government will make changes to the foreign investment framework to allow foreign buyers to buy an off-the-plan dwelling that another foreign buyer has failed to settle as a new dwelling.
Previously, on-sale of a purchased off the plan apartment was regarded as a second hand sale, which is not open to foreign buyers. Foreign buyers can only buy new dwellings.
The move effectively opens up the pool of buyers who can soak a potential flood of apartments hitting the residential markets due to failed settlements.
"This change addresses industry concerns, and means property developers won't be left in the lurch when a foreign buyer pulls out of an off-the-plan purchase," Mr Morrison said in an announcement.
"It is common sense that an apartment or house that has just been built, or is still under construction and for which the title has never changed hands, is not considered an established dwelling."
Default rate on rise
The policy change comes after Mirvac said it experienced a rise in the default rate for the settlement of off-the-plan residential sales, above its historic average of 1 per cent.
The changes will apply immediately and regulation change will be made soon to enable developers to acquire "New Dwelling Exemption Certificates" for foreign buyers of these recycled off-the-plan homes.
On top of defaults, the Australian apartment markets – which boomed in the last four years – are facing other fresh risks.
On Friday, HSBC said an oversupply of apartments in Melbourne and Brisbane could send unit prices down by as much as 6 per cent in 2017.
The apartment building boom, an ongoing concern for the Reserve Bank of Australia, especially in inner city Melbourne is likely to "start showing through" in price drops of between 2 per cent and 6 per cent in that city next year, HSBC chief economist Paul Bloxham said in a note.
It's a similar story in Brisbane where apartment prices are forecast to fall by as much as 4 per cent.
"A national apartment building boom, which has been part of the rebalancing act, is likely to deliver some oversupply in the Melbourne and Brisbane apartment markets, which is expected to see apartment price falls in these markets," Mr Bloxham said.
"A modest shakeout in the inner-city apartment markets in Brisbane and Melbourne, as we are forecasting, is not expected to have a broad-based impact on the overall housing market or economy."
While apartment prices could fall, there were little expectations of price falls in second hand dwellings and houses as stock levels remain tight.
Read more: http://www.afr.com/real-estate/scott-morrison-eases-limits-on-foreign-buyers-as-apartment-glut-looms
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Scott Morrison eases limits on foreign buyers as apartment glut looms
The federal government has announced it will make it easier for foreigners to buy new apartments amid concerns of a looming glut that will drive down prices.
Treasurer Scott Morrison said the government will make changes to the foreign investment framework to allow foreign buyers to buy an off-the-plan dwelling that another foreign buyer has failed to settle as a new dwelling.
Previously, on-sale of a purchased off the plan apartment was regarded as a second hand sale, which is not open to foreign buyers. Foreign buyers can only buy new dwellings.
The move effectively opens up the pool of buyers who can soak a potential flood of apartments hitting the residential markets due to failed settlements.
"This change addresses industry concerns, and means property developers won't be left in the lurch when a foreign buyer pulls out of an off-the-plan purchase," Mr Morrison said in an announcement.
"It is common sense that an apartment or house that has just been built, or is still under construction and for which the title has never changed hands, is not considered an established dwelling."
Default rate on rise
The policy change comes after Mirvac said it experienced a rise in the default rate for the settlement of off-the-plan residential sales, above its historic average of 1 per cent.
The changes will apply immediately and regulation change will be made soon to enable developers to acquire "New Dwelling Exemption Certificates" for foreign buyers of these recycled off-the-plan homes.
On top of defaults, the Australian apartment markets – which boomed in the last four years – are facing other fresh risks.
On Friday, HSBC said an oversupply of apartments in Melbourne and Brisbane could send unit prices down by as much as 6 per cent in 2017.
The apartment building boom, an ongoing concern for the Reserve Bank of Australia, especially in inner city Melbourne is likely to "start showing through" in price drops of between 2 per cent and 6 per cent in that city next year, HSBC chief economist Paul Bloxham said in a note.
It's a similar story in Brisbane where apartment prices are forecast to fall by as much as 4 per cent.
"A national apartment building boom, which has been part of the rebalancing act, is likely to deliver some oversupply in the Melbourne and Brisbane apartment markets, which is expected to see apartment price falls in these markets," Mr Bloxham said.
"A modest shakeout in the inner-city apartment markets in Brisbane and Melbourne, as we are forecasting, is not expected to have a broad-based impact on the overall housing market or economy."
While apartment prices could fall, there were little expectations of price falls in second hand dwellings and houses as stock levels remain tight.
Read more: http://www.afr.com/real-estate/scott-morrison-eases-limits-on-foreign-buyers-as-apartment-glut-looms