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One third of home loans written by Yellow Brick Road Holdings were to Chinese investors; $320 million lent to Chinese investors out of a total $1.1 billion
Topic Started: 23 Oct 2014, 05:03 PM (4,045 Views)
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Morning all.....

So Peter, your not seeing 30%. You are in brisbane though ,so would not see as much anyway. But as you say, they are probably promoting heavily to the chinese somewhere.

I would not be surprised if some areas of Sydney were seeing 30%.

Tell us this, are you able to see superfund borrowings, if so, what do the numbers look like, have they been increasing ?

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Emmanuel
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YBR can simply form relationships with developers. And why not? Off-the-plan property has been heavily marketed in Asia for years: half the Straits Times & South China Morning Post is full-page ads for Aussie property.
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Massive
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miw
25 Oct 2014, 04:41 PM
I can confirm that at least some people are marketing Aussie real estate in China. There is an Aussie real estate fair on in one of the major hotels here nearly every week. I should pop by one day and see if the finance part of the package is YBR.
some ?

seems every second aussie i meet at property mixers are here to sell aussie property to mainlanders

and im getting more and more calls from old associates in oz asking if i have clients in china that would be interested in aussie property.. truth is though, most of my clients already own there or negotiating purchases ..
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miw
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Massive
26 Oct 2014, 02:16 PM
some ?

seems every second aussie i meet at property mixers are here to sell aussie property to mainlanders

and im getting more and more calls from old associates in oz asking if i have clients in china that would be interested in aussie property.. truth is though, most of my clients already own there or negotiating purchases ..
I guess it depends on what mixers you go to. :-)

At the mixers I go to 95% of Aussies I meet are artists and most are very much against property ownership of any kind (except for art, of course. :-) The other 5% are galarists.....
The truth will set you free. But first, it will piss you off.
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Lef-tee
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peter fraser
26 Oct 2014, 07:32 AM
It's a little ambiguous whether 30% of loans were written for Chinese nationals or whether 30% was written for people of Chinese ancestry some of whom are Chinese nationals.

Read this - http://www.brokernews.com.au/news/breaking-news/chinese-investors-account-for-a-third-of-mortgages-franchise-says-193147.aspx

I'm not sure whether it was a sweeping statement by Bouris. I mean who keeps records of the ancestry of buyers who hold Australian citizenship. That would be absurd. If Bouris has figures at all it would be from their marketing department, or deals written that were sourced in Mainland China. There is nothing in the lending process that counts these stats, but YBR would have marketing stats that records the source of the application.

I have no doubt that there are a lot of Foreigners in the market at the moment many of whom are Chinese, but 30% just doesn't sound right to me.

Yes, that's not clear either.

Like I said, it bears keeping a close eye on but this is difficult because the FIRB's mission appears to be to protect confidentiality rather than inform us.
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peter fraser
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26 Oct 2014, 08:42 AM
Morning all.....

So Peter, your not seeing 30%. You are in brisbane though ,so would not see as much anyway. But as you say, they are probably promoting heavily to the chinese somewhere.

I would not be surprised if some areas of Sydney were seeing 30%.

Tell us this, are you able to see superfund borrowings, if so, what do the numbers look like, have they been increasing ?

Hi Ted, hope you had a good day.

You're right this isn't my market although I do loans for expats wanting a place in Oz to return to when they finish their O/S stint.

YBR are still a fairly new organisation and they have grown very quickly, but then Mark Bouris is well experienced in the industry. No doubt they had clear marketing strategies in place and no doubt they looked at opportunities that others hadn't yet targeted, so I can believe that buyers from mainland China and other Asian centres are an important market for them, but I doubt that the same numbers will be seen across the whole market. Other major players won't be seeing 30% of their loans written to Asian investors.

Banks and other lenders would know what proportion of their loans are written to overseas investors and they may have a country by country breakdown. All of that is recorded in the loan application for non-residents. Maybe they will give us some information at some point.

SMSF Borrowing - you have to allow for the fact that about 8 years ago there were no options for an SMSF to borrow to buy property. When the rules were changed a lot of people with an SMSF obviously decided to purchase a home for their future use post retirement, they are able to do that under the regulations. However if they are buying investment houses then they will have an issue when they retire and have to begin paying out a set percentage of the funds held as a pension to the beneficiaries. Commercial property has a much better return, but has extended periods of vacancy, whilst residential is more reliable but has a low return and eventually the asset would have to be sold to allow the fund to distribute the funds.

I see too many problem issues for SMSF buying resi property except where it will become a retirement house for the beneficiaries, therefore although this area has seen strong growth from a zero base, its growth is self limited by the practicalities in play, unless there is something that I don't understand about this issue, and that is possible.

Any expressed market opinion is my own and is not to be taken as financial advice
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Emmanuel
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Unfortunately, one of the issues with YBR and its success is not the business itself, but it's the envy that exists among some camps among the banking system. I am convinced that our banks are rarely beyond reproach, however it should not mean that different business models should not be encouraged. As we know, the more services offered to the public, quality improves and costs go down. Now, when we think of what YBR is doing compared to say CBA, we're really talking about a win-win situation: the borrower sets themselves up for life and the lender makes a nice little earners. Furthermore, this boosts Australia's GDP and wealth while the rest of the world looks on with a look of disbelief and amazement.
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peter fraser
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Emmanuel
1 Nov 2014, 01:03 PM
Unfortunately, one of the issues with YBR and its success is not the business itself, but it's the envy that exists among some camps among the banking system. I am convinced that our banks are rarely beyond reproach, however it should not mean that different business models should not be encouraged. As we know, the more services offered to the public, quality improves and costs go down. Now, when we think of what YBR is doing compared to say CBA, we're really talking about a win-win situation: the borrower sets themselves up for life and the lender makes a nice little earners. Furthermore, this boosts Australia's GDP and wealth while the rest of the world looks on with a look of disbelief and amazement.
Lol - for a guy who describes himself as a proud crashnik you are sounding more unhinged every day.

Entertaining though, keep it up.

Any expressed market opinion is my own and is not to be taken as financial advice
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Emmanuel
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peter fraser
1 Nov 2014, 02:16 PM
Lol - for a guy who describes himself as a proud crashnik you are sounding more unhinged every day.

Entertaining though, keep it up.
What on earth is a crashnik?
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