As soon as I saw the huge number of Apartment starts planned for South East Queensland I knew there’d be trouble.
I watched the advertised “starting from” prices for 3 nearby developments go from $399,000 to $389,000 to $349,000 and $309,000 over 12 months until now where there are no prices listed, just FOR SALE signs.
Chinese who bought off the plan face capital export bans and are unable to complete their purchases. No solution here either as local banks will not finance them. The fallover rate for offshore Contracts is running at 50 to 70%. Buyers are walking away from their 10% deposit and Developers are unable to force completion. Try suing an individual in China… good luck.
Panic re-sales are resulting in spectacular losses. One large high floor apartment sold at a 42% loss before completion with the average loss now creeping into the 35%+ range.
This in the start of a pandemic. You cannot have such a large sector suffer huge monetray losses and loss of confidence without the effect spilling over into the rest of the market. Banks will pull tighter on lending criteria – there are many calls for Royal Commissions into Broker and Bank predatory lending practices – nothing will come of it of course, the blame being put on “market conditions” or some other such nonsense.
With interest rates on the rise, Banks under pressure and “the market” suffering a serious case of “the wobbles”, it won’t be long…