Monthly Archives: March 2014

MARKET UPDATE 31 MARCH 2014

Good Morning.  All I have to say is go here –

http://www.smh.com.au/business/the-economy/housing-bubble-fears-property-prices-could-fall-10-to-20-per-cent-20140331-35sg7.html

 

I rest my case…

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MARKET UPDATE – 25 MARCH 2014

I receive a fair bit of ‘junk mail’ from local real estate agents squawking about their ‘successes’ in the market. Today I once again did the exercise of digging into their claims about speedy sales, plenty of buyers and wanting more listings.

One would think that if, as an agent, you’d sold and settled a property sale in December 2013, you wouldn’t still be proclaiming it as a “Recent Sale” in late March the following year…or would you you?  Well, YES!  That is really sad, and by any measure, false and misleading.

The newspapers are full of “leading agents” saying they can’t get enough listings, the market is white hot right now, you’re surely gonna miss out…and so on.

So now to the “analysis” of the listings, sales and other nonsense contained within one piece of junk mail today. Just Listed for Sale at $480,000.00.  This place was sold to the current owners in mid 201 for $485,000.00.  Gonna be a great outcome for them by the looks.  Snap this up at offers over $550,000.00 – it was bought by the current owners for $570,000.00 in January 2009 – another success!  And lastly, Offers over $825,000.00 please, so you know its going to sell for mid to high 700’s. It fetched $1,040,000.00 in early 2007 (at the near height of the madness), changed hands at $875,000.00 18 months ago and now the new owners want out.  That’s just nasty.

I cannot find anywhere, a real story of anyone making a real, tangible profit.  Sure there are buys 4 years ago at $500,000.00 with a recent sale at $535,000.00 but that doesn’t take into account buying and selling costs, nor, in most cases, the tens of thousands of dollars spent on repairs or additions.

I’m still looking for this “golden era” but alas, unless a Chinese buyer has their hooks in the deal, it’s all smoke and mirrors.

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CHINA’s INFLUENCE ALL PERVASIVE

As I write about China’s insatiable appetite for real estate resources across the Globe, I’m sent the following article from the BBC UK.

http://www.bbc.com/news/world-europe-26639991

There are some serious problems for the countries mentioned therein as they seek short-term gain without analysing and planning for the long-term pain associated with their respective agendas.

I’ll leave you to reach your own conclusions on this.

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FOREIGN INVESTMENT REVIEW BOARD (FIRB)

…is an Agency with no teeth.  Of no use to Australians. Should be scrapped or given power to do what it’s supposed to do.

A friend of mine is a foreign national who bought property in Australia a while ago.  He found out he wasn’t supposed to own property here so he called the FIRB to see what he had to do.

FIRB told him there were no penalties, that he would have to sell the property but, and here’s the kicker, that he could take as long as he needed to.

Worthless.

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CHINA UPDATE – CANADA

My 100th post stirred up some emotions.  Thanks for the feedback, good and derisory.  Appreciated.

Apparently we aren’t the only ones being affected by the tsunami of Chinese money pouring into our real estate markets.

Just Google something like Chinese Buyers and Vancouver to see what comes up.  There’s a real problem there too.

I’ll leave you to do your own research.  

I wonder what other markets are being similarly invaded?

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CHINA’S INFLUENCE

I’ve been banging on for nearly a year about the high level of Chinese buying in the market, especially in Sydney and Melbourne.  I’ve also said that their buying sprees are based on “get anything desirable at any price – just beat everyone to the property”.

I’ve been criticised for over stating the facts.  Thanks to all you who’ve “had a crack”.  Well now you are going to look rather foolish, and those of you who emailed me can now say “Sorry GW, you were right after all”.

Below, from the Sydney Morning Herald of 06 March 2014 by Reporter Max Mason….thanks Max!

Close to one-fifth of new properties in Sydney are being bought by wealthy Chinese investors and the flood of money is set to continue.

Using data from the Australian Bureau of Statistics and the Foreign Investment Review Board, Credit Suisse estimates that Chinese buyers account for 18 per cent of new property purchases in Sydney, and 14 per cent of the supply in Melbourne. This does not include second-hand homes.

”A generation of Australians are being priced out of the property market. Many face a lifetime of renting,” analysts Hasan Tevfik and Damien Boey said.

There are currently 1.1 million millionaires in China who could easily afford properties in Australia’s two most expensive markets, Credit Suisse said.

Wealthy Chinese buyers have purchased $24 billion of Australian housing in the past seven years, and over the next seven years an additional $44 billion will be spent on residential property, Credit Suisse estimates.

There was $17.2 billion worth of approved residential property investment coming in from overseas in the year June 30 2013, down from $19.7 billion in the previous period, according to the FIRB. Foreigners must seek approval to buy established real estate and rural land, but can buy up to 50 per cent of a new building ”off the plan”.

Of the 2013 total, $5.6 billion was approved for residential properties in New South Wales.

Read the rest of the article here – http://www.smh.com.au/national/locals-priced-out-by-24-billion-chinese-property-splurge-20140305-347oq.html

What this DOES NOT tell you, because its all Foreign Investment Review Board figures, is the number of properties being bought by Chinese Australian citizens and permanent residents, with money (not theirs by the way!) repatriated from China via Hong Kong.  Now that is a whole other story!

More as it comes to hand.

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