Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Our latest chat about property focused on migration increasing, as announced by the Government over the weekend, and the impact on the markets – especially the rental sector. Plus of course Edwin’s regular updates on Sydney stats, and latest news.
https://www.ribbonproperty.com.au/
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This is an edited version of a live discussion about the current state of property with Veronica Morgan.
Original stream here: https://youtu.be/UUxirTjEUbM Veronica Morgan is principal of Good Deeds Property Buyers and co-host of Location Location Location Australia & Relocation Relocation Australia on the Lifestyle Channel. She also co-hosts The Elephant In The Room Podcast, and First Time Buyers Academy.
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Latest from Edwin our property insider. This tip of the week today is gold. https://www.ribbonproperty.com.au/ Go to the Walk The World Universe at https://walktheworld.com.au/
My latest Monday evening chat with our property insider Edwin Almeida. We look at the latest from China, consider the rise in chickens at Edwin’s place, and reflect on the resignation of a Building Reform champion. Plus the latest on the numbers, and a discussion on land banking. And you can play spot the pussy cat… somewhere through the show. https://www.ribbonproperty.com.au/ Go to the Walk The World Universe at https://walktheworld.com.au/
We unpick the “supply-side” problems which are often blamed for high home prices, and in the light of a recent report, find that Land Banking is a significant issue, as large players hold on to land parcels to exploit prices rises. This means you cannot solve affordability by changing planning rules! In addition, there is significant information asymmetry and financial players benefit from the current arrangements – while State and Federal Governments look the other way. Go to the Walk The World Universe at https://walktheworld.com.au/
Edwin Almeida, our Property Insider joins us through another ramble through the latest property news, including rooster cam, news from China, and the latest in listings numbers. We also look at the latest articles and consider the impact of the recent rains on high-rise property in particular.
Go to the Walk The World Universe at https://walktheworld.com.au/
It started as an act of protest by fed-up apartment buyers in a single project in a city in central China. Now tens of thousands of people around the country are withholding payments on their mortgages for homes that developers, including China Evergrande Group, have yet to finish.
The movement has since spread to at least 301 projects in about 91 cities according to figures from a crowdsourced document titled “WeNeedHome.”
Tracking the extent of the protest has grown increasingly difficult after China began censoring in mid-July crowdsourced online documents tallying the number of boycotts. Such shared files have been a key source of data for global investors and researchers.
Real estate accounts for about 78% of household wealth in China—double the US rate—and families typically save for years and borrow from friends and family to purchase a home. As the Evergrande debacle unfolded last year, many market watchers said that the financial contagion would be limited by the fact that homebuyers in China often pay in cash. But some did use mortgages, and the boycott underscores how much of the pain of the crisis has fallen on households. China’s outstanding mortgages stood at 38.3 trillion yuan at the end of 2021, according to the People’s Bank of China. GF Securities Co. expects that up to 2 trillion yuan ($296 billion) of mortgages could be impacted by the collective refusals. That’s the total balance of the loans; the amount that could be withheld will be smaller.Should every buyer default, that would lead to a 388 billion-yuan increase in nonperforming loans, Jefferies’s said.
Banks say the impact is much lower still. Lenders have detailed about 2.11 billion yuan of loans at risk from the protests, according toa tally of banks that have disclosed their exposure.
The wildcat boycott on loans worth as much as 2 trillion yuan ($296 billion) threatens to deepen China’s real estate slump by shifting focus from the country’s embattled property companies to its massive banks. Lenders have relied on mortgages as their safest source of revenue as Covid lockdowns stifle growth.
Go to the Walk The World Universe at https://walktheworld.com.au/
We look at the latest from China, cheap food, more listings, and unions in the Real Estate sector with our property insider Edwin Almeida. And we ask what’s wackier than a conspiracy theory, and look at “Frictional Unemployment…”
https://www.ribbonproperty.com.au/
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Following the Reserve Bank’s double rate hike, big banks have lifted all their variable mortgage rates by 0.5 percentage points. As a result, the average variable borrower will have seen their rate rise by 1.25 percentage points since the start of May. That means someone with a $500,000 mortgage, with 25 years remaining, will see their repayments increase by an estimated $333 in total across the three hikes, RateCity.com.au said. While variable rate borrowers with loans with CBA, NAB, and ANZ will be charged a higher interest rate starting today, it will take weeks for their monthly repayments to rise. In fact, the increase in monthly repayments many of these customers are currently seeing resulted from the May hike. This is because banks typically give 20 to 32 days’ notice before lifting their monthly repayments, despite charging their customers the higher rate from the effective date. Even then, the increase to their monthly repayment might not take effect for another few weeks, depending on when they are due. UBS has predicted interest rates will peak at around 3.5 per cent in March next year, but said this will still hit the housing market hard. “We still think market pricing of about 3.5 per cent – if delivered – would likely crash housing, and see the economy nearing a recession,” George Tharenou, chief economist at UBS, told The Australian. If interest rates were to rise to 3.5 per cent it would likely see the average variable mortgage rate hit a whopping 6 per cent and could plunge the economy into recession, according to the investment bank. “Interest payments across the economy next year for the household sector will close to double from now,” Mr Tharenou said. “We have never seen such a sharp increase in repayments. That really crushes household cashflow next year when you have cost-of-living issues.” Go to the Walk The World Universe at https://walktheworld.com.au/ Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Our latest property-related chat with Edwin Almeida, our property insider as we look at the latest from China in terms of new migrants, listing numbers, real estate agent behaviour, and the shape of the market. And we have Edwin’s latest hot tip.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
