Claim and counter claim..Australia six weeks from a housing collapse

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http://www.news.com.au/finance/economy/australian-economy/australia-six-weeks-from-a-housing-collapse-us-report-warns/news-story/866d2fdee41b1227ce654f66ed8d9837

AUSTRALIA has roughly “six weeks” to prevent a housing market collapse caused by the banks’ crackdown on foreign investor lending, a US defence think tank has warned.

In an article titled “Australia Risks Strategic Setback From a Significant Foreign Direct Investment Drop Due to Changes in Bank Policies”, the Washington-based International Strategic Studies Association warns that Australia “may be entering a significant phase of its economic-strategic development”.

It argues “changes in local banking policies” could see foreign direct investment in the property sector “decline markedly”. “This will profoundly impact the Australian government’s ability to fund major programs in the defence and civil sectors,” it said.

The article is contained in the ISSA’s latest Global Information System newsletter, described as a “strategic intelligence service for use only by governments”.

“The Royal Australian Navy’s submarine acquisition program, budgeted at $50 billion, may be the first major defence casualty,” the article said.

“However, the government itself seems unaware that the anticipatory caution on the part of Australian banks may accelerate a decline in the Australian economy.”

ISSA president, West Australian-born Gregory Copley AM, told news.com.au the “banks’ caution is precipitating the market collapse”.

“We estimate that Australia has about six weeks or so to turn this situation around, otherwise there would be a massive hit on property valuations and the building trades,” he said.

“The urgency is, I believe, based on the fact that this is about how long it will take for the banks’ policies to start switching off a lot of existing and planned contracts for Australian properties.

“The banks clearly believe Australian real estate values will decline, so they are attempting to avoid that risk. They’ve learned from the US collapse that seizing real estate collateral is a no-win scenario when the volume is great and the market slow.

“In so doing, they precipitate the market collapse but are less exposed to it.”

It comes after Australia’s richest man, billionaire property developer Harry Triguboff, warned that a “very significant” number of Chinese buyers were now failing to settle their off-the-plan units and urgent action was needed.

http://www.9news.com.au/national/2016/09/12/18/54/claims-australian-housing-market-on-the-brink-of-collapse-rubbish

NAB chief economist Alan Oster described ISSA’s prediction as “garbage”.

“What the banks were trying to do with the tightening of apartment lending, particularly to foreigners, was make sure that if people were having trouble offshore they didn’t end up in the Australian banking system,” he told News Corp.

CoreLogic head of research Cameron Kusher said the odds of the housing market collapsing in just weeks is “highly unlikely”.

“I think the odds of that happening are extremely low, less than 1 percent,” he told nine.com.au.

“We do know that a lot of lenders have tightened up the lending policies… and that may lead to some people not being able to settle on properties they have purchased.

He said given there isn’t “clear enough data” on the magnitude of foreign investment on the housing market, it “opens a can of worms for this kind of speculation to happen”.

Mr Kusher argued that if foreign investors were unable to settle their properties local investors would be willing to step in.

Meanwhile, he said the current state of the play in the Australian housing market is that while the rate of growth has slowed from its peak 12 months ago, property values continue to rise.

“At the moment it’s (the market) is in favour of sellers… not a lot of stock (houses) available for sale,” he said.

———–

so who do you believe?

“It argues “changes in local banking policies” could see foreign direct investment in the property sector “decline markedly”. “This will profoundly impact the Australian government’s ability to fund major programs in the defence and civil sectors,” it said.”

or..

“What the banks were trying to do with the tightening of apartment lending, particularly to foreigners, was make sure that if people were having trouble offshore they didn’t end up in the Australian banking system,” he told News Corp. CoreLogic head of research Cameron Kusher said the odds of the housing market collapsing in just weeks is “highly unlikely”.

401

~ by seeker401 on September 15, 2016.

6 Responses to “Claim and counter claim..Australia six weeks from a housing collapse”

  1. Most dire predictions these days have not panned out. I’d be more worried about a market & banking collapse, myself.
    And I’ve never been comfortable with foreign entities owning property in any other sovereign nation, IMNSHO, foreign property control should be limited to leases with a legally controlled expiration period.
    Why would any nation allow foreign interests to buy their country out from under them?

  2. CBA ..short?

    https://capitalistexploits.at/2016/09/australian-banks/

  3. Reblogged this on World Peace Forum.

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