Australian apartment developers offered an exit strategy
With Chinese buyers starting to rescind on apartments, a Hong Kong based real estate marketing company specialising in Australian distressed real estate is offering property developers an exit strategy for unsold and settlement risk apartments (unsettled). The company is seeking distressed apartment stock to service a mammoth client list of bargain hunting property investors.
With warnings from the IMF, RBA, financial institutions and many respected economists such as Morgan Stanley, the Australian housing bubble is showing signs of collapsing and many Australian apartment developers are desperate to exit the market before the bubble bursts.
Date: November 11 - Reviews: 3,588
Published by: Mortgagee Property Limited - Reporter: Scott O. Talbot
Category: Australian apartment developers
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Settlement risk and apartment oversupply is compounding the lack of confidence in the Australian apartment market with property developers preparing for the worst outcome.
“Smaller mum and dad type property developers with unsold apartments that failed to settle or were never sold will become ‘Egyptian Stock’ when the property bubble bursts, that could send many property developers to his or hers financial tomb.” Said Scott O. Talbot, Australian founder of www.mortgageeproperty.com
In recent articles, off-the-plan apartment sales that fail to settle are confirmed by the Australian Taxation Office as secondhand apartments, lowering the resale price even further.
The Mortgagee Property Ltd member database holds more than 107,000 foreign and local property bargain hunters including private investors, wealthy families and companies, all of whom have registered this year to receive Australia real estate offerings under duress. Further said Scott O. Talbot
Australian property developers wishing to exit the Australian apartment market are invited to contact the Hong Kong office of Mortgagee Property Ltd.
Australia Reserve Bank warning could send some developers broke
Published in the Australian News Paper, Friday, November 18th - Page 2 .
The Reserve Bank has repeatedly warned about risks in the current apartment market, saying the huge number of new apartment blocks approaching completion could send some developers broke and leave the banks nursing big losses.
Almost 100 “distressed” apartments in Melbourne and Brisbane have been sold through Hong Kong-based Mortgagee Property in the past three months to bargain-hunting investors for prices 20 per cent to 30 per cent lower than developers’ original valuations.
The company, founded by Australian businessman Scott Talbot after the global financial crisis, has gathered more than 100,000 interested investors around the world seeking a bargain as apartment buyers are expected to rescind contracts and developers try to clear unsold stock. “We reactivated the www.mortgageeproperty.com platform 12 months ago, to prepare for the imminent downturn of the apartment market in Australia,” Mr Talbot told The Australian, noting there was “a huge credit crunch” going on.
Australian home owners in regional areas are falling behind in their mortgage repayments at a faster rate than city property owners as a result of rising unemployment in the country and the end of the mining boom.
A report published by Standard & Poors charting the east coast mortgage arrears rate found that Cairns, Townsville and Wide Bay home owners were most likely to be at least 30 days behind in repayments on their home loans.
The number of regional homeowners in arrears has increased 18 per cent in the past year to July, compared to the 2 per cent growth among metropolitan mortgagees.
Separate research from S&P, a global ratings agency, found Broken Hill in NSW, Queensland’s Armstrong Beach, Currency Creek in South Australia and Western Australia’s Butler had the highest rate of loans overdue in the country.
“Mortgage delinquencies in regional areas traditionally have outpaced metropolitan areas,” the report said. “This often has been the case because regional centres are more vulnerable to a downturn.” S&P analyst Erin Kitson said mining and manufacturing regions, especially in Queensland and Victoria, were struggling because of big job losses over the past two years. Mortgage arrears rates in Geelong, a key car-producing and manufacturing hub, rose sharply in the past year as thousands of workers were laid off.
“If you look at the areas where the arrears have been growing, it is primarily regions where industry or major employers have exited the area and that has led to an increase in job losses,” Ms Kitson said. “So you have a situation where people become unemployed but they still have to pay their mortgages
“The non-metropolitan regions of Australia tend to have economies which are less diverse compared to metropolitan areas, which means if you lose your job in Wide Bay there are going to be less opportunities than if you lost your job in Sydney or Melbourne.”
North Queensland MP Warren Entsch said Cairns was beginning to recover from an economic downturn that hit the city from the end of the mining boom in neighbouring regional areas.
“We’re going from strength to strength in Cairns; there’s a number of different projects which have been on the backburner for years starting work now,” he said.
“There’s two cranes on the skyline in the city. That’s the first time I’ve seen that in about a decade.”
Meanwhile, almost 100 “distressed” apartments in Melbourne and Brisbane have been sold through Hong Kong-based Mortgagee Property in the past three months to bargain-hunting investors for prices 20 per cent to 30 per cent lower than developers’ original valuations.
The company, founded by Australian businessman Scott Talbot after the global financial crisis, has gathered more than 100,000 interested investors around the world seeking a bargain as apartment buyers are expected to rescind contracts and developers try to clear unsold stock. “We reactivated the www.mortgageeproperty.com platform 12 months ago, to prepare for the imminent downturn of the apartment market in Australia,” Mr Talbot told The Australian, noting there was “a huge credit crunch” going on.
The Reserve Bank has repeatedly warned about risks in the current apartment market, saying the huge number of new apartment blocks approaching completion could send some developers broke and leave the banks nursing big losses.
At least 40,000 inner-city apartments will be completed in the next two years in Melbourne, Brisbane and Sydney, according to the central bank’s estimate.