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Up to 30,000 Chinese investors likely to default
Topic Started: 30 Nov 2016, 06:13 PM (2,553 Views)
Ex BP Golly
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Chinese property investors may be forced to sell as bank finance dries up
AM BY CHINA CORRESPONDENT BILL BIRTLES NOV 28

....Earlier this year, the big four banks cut off lending to offshore investors in a bid to reduce the amount of risk they took on.

They were spooked by some applications with fraudulent proof of income, and wanted to rein in lending to avoid being too reliant on Chinese borrowers....China's banks have cracked down on money heading abroad, so investors have been left trying to borrow from other Asian banks.....Say about 30 per cent of them are able to pay it all up front, that leaves about 30,000 investors here who are affected — that's quite a large number....Property developers in Australia have, in recent months, reported Chinese buyers rescinding their contracts as the squeeze takes hold....



http://mobile.abc.net.au/news/2016-11-28/chinese-property-investors-worried-after-big-banks-change-rules/8062530?pfmredir=sm
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Tick Tock
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Good.

About bloody time too!
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Foxy
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Zero is coming...

Tick Tock boys and girls..

Foxbat
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Elastic
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This has the potential to create some serious problems with the high rise market in Australia, given that there was already a problem with possible over supply. Be interesting to see how this pans out.
I've often thought that these high rises are the affordable housing of the future and it may occur a little earlier than I expected. Strange that the banks could be cutting their own throats here and if it starts deteriorating then the banks will tighten even further exacerbating the problem.
Only a rat can win a rat race.

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zaph
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Quote:
 
Bank of Queensland chairman Roger Davis has highlighted the risks from a looming surge in apartment settlements in Brisbane and Melbourne amid signs more buyers are facing difficulties completing off-the-plan purchases.

While arguing there was not an economy-wide housing bubble, he stressed that property prices in key areas were "high," and a coming risk was the high number of off-the-plan apartments due to be settled in Brisbane and Melbourne, especially.

However, banks are reporting a growing number of buyers are struggling to settle on time because they are unable to obtain finance from their bank. Some bank valuations of properties are also below what buyers have agreed to pay in their contracts, the RBA said last month.
http://www.brisbanetimes.com.au/business/banking-and-finance/apartment-settlement-bulge-will-be-a-key-risk-for-property-bank-of-queensland-20161130-gt0kaw.html
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Elastic
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I've said before that the building of all these apartments is the only real way that a potential oversupply can occur in Australia since detached housing is generally built to demand. There is also a large pipeline of projects underway to add to this problem. With our high immigration intake you would expect many of these to be absorbed but as we've seen in Perth it doesn't take a significant oversupply before downward pressure on rents and prices starts to occur.
The other issue is that construction is a large employer so you could get a significant downturn in employment which then results in 457 workers and others leaving the country.
The fall in construction in this quarter alone is expected to have a significant impact on GDP along with the ongoing fall in mining investment. Then you have the shuttering of the auto industry and it's easy to see some significant headwinds for the Australian economy over the next year.
Only a rat can win a rat race.

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Jon Snow
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Elastic
30 Nov 2016, 09:38 PM
I've said before that the building of all these apartments is the only real way that a potential oversupply can occur in Australia since detached housing is generally built to demand.
Assuming the population always grows, and living densities stay the same. Stresses on income can see children returning to the nest (which happened in the US in 2009), which lowers demand for existing dwellings.
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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zaph
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Elastic
30 Nov 2016, 09:38 PM
I've said before that the building of all these apartments is the only real way that a potential oversupply can occur in Australia since detached housing is generally built to demand. There is also a large pipeline of projects underway to add to this problem.
OFP apartments are also generally built to demand. Harry sells them, then builds them, just the same way that detached housing is sold and then built. The difference is the Chinese buyers buy apartments and are projected to have trouble settling. The same thing could happen with greenfields detached housing - it's just that it's not what Chinese are currently demanding.
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Jon Snow
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zaph
30 Nov 2016, 10:03 PM
OFP apartments
Off the F^cking Plan ?
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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Elastic
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zaph
30 Nov 2016, 10:03 PM
OFP apartments are also generally built to demand. Harry sells them, then builds them, just the same way that detached housing is sold and then built. The difference is the Chinese buyers buy apartments and are projected to have trouble settling. The same thing could happen with greenfields detached housing - it's just that it's not what Chinese are currently demanding.
That's true but when you are selling to overseas buyers there is a strong chance that they are not going to live in them. Australian investors have an aversion to buying off the plan so they don't often add to supply.
Only a rat can win a rat race.

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