What did he just say?

We received an e-mail from a reader last night about something they had heard on ABC local radio in Brisbane as they were driving home.

On the way home from work today, on 612 ABC Brisbane’s news, there was a story about the member for Gaven, Alex Douglas (shown above) suggesting that the state and federal government offer Japanese ultra cheap flights so they could stay in the empty gold coast units.

This is where it got interesting. He said that there were over 3500 EMPTY gold coast units that could be rented out to Japanese people to counter-act the effects of the tsunami.

I have tried to find the transcript of the interview on the net and by contacting the ABC to see if there is one available. I so far have received no response, I therefore cannot 100% validate this readers claim.

I do support Alex’s intentions, however having a number of Japanese friends who currently live in and around Tokyo I think things will need to get much worse before there are any takers. I am very doubtful however that the admission of 3,500 empty apartments would have been welcomed by the local real estate industry that now seems to be taking a daily beating from various news sources. Today it is SQM’s turn via smartcompany.

The property market in south-east Queensland is in danger of a meltdown, with prices to drop by up to 7% this year alone, one property expert has warned, saying there is too much stock on both the Sunshine and Gold Coasts.

However, the comments come as a new report from ANZ argues the housing market has held up just fine, arguing prices will ultimately be sustained by higher income growth.

Speaking at a property investment conference, SQM Research managing director Louis Christopher revealed his rather bearish predictions for the Queensland market, saying the sheer amount of stock in those areas has turned the region into a “basket case”.

“Stock levels are increasing in south-east Queensland more so than last year, and it’s getting back to those 2008 levels now. We think that represents a massive oversupply.”

Christopher points to SQM data which shows there are over 2,000 properties in Surfer’s Paradise in one postcode alone. “This is bordering on a meltdown scenario,” he says.

“We think there has been a 9% decline on the Sunshine Coast since 2008, and we think we’re going to see a 7% decline before the end of this year.”

“This is a significant issue, and unfortunately it’s going to hurt a lot of amateur mum and dad investors.”

Don’t forget about the banks Chris.

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Comments

  1. Are the banks exposure on the sell side or the buy side?
    .
    On the buy side – I have read elsewhere that come settlement time, banks have gone back on their lending and left the Gold coast buyers and developers hanging in the wind.
    .
    On the sell side – I have read that banks had put a 20% cap on presales to overseas investors. So they don’t spend too much time running after these buyers come settlement time 🙂

  2. If the Japanese start looking for overseas accomodation then Australia’s empty appartments may have to compete with China’s empty cities.

  3. Yes DE
    You may have trouble ..
    I remember on Q&A and Malcolm T said ,
    and I’m sure I heard him ,that , Nobody could see the global financial crisis
    coming…checked later at abc net ..no mention.

    JR

  4. In response to this article I thought I’d post the following link I came across, it was interesting to read through this web page and look at the projected portfolio future worth.

    Note the type of properties and where they are located…..

    I doubt that this portfolio will lead to a comfortable retirement unless a retirement in the red is what you are seeking….

    http://www.retireonproperty.com/propertyinvesting/our-portfolio.html

  5. I can see politically motivated assassinations becoming the norm before too long (not just referring to Australia).

  6. A search on realestate.com.au for apartment/units returns 1725.
    Experience suggest it will be a fraction of the true figure.

  7. In reference
    I work-nights .So don’t get to see the empty units on the Gold coast…so clearly
    (my-excuse)…But when I drive around ,not far’ and ‘Seven and I holdings’, Has got the servo’s for them,,and I’ll make sure at their Convenience ,I do my bit to help…

  8. “However, the comments come as a new report from ANZ argues the housing market has held up just fine, arguing prices will ultimately be sustained by higher income growth.”

    This is just silly – it is only true, really, if one assumes that people WILL pay more because they CAN, which is clearly not a necessary logical link.

    In fact, the reverse is likely to occur: a deflationary mindset will become the predominant paradigm, where, if prices are coming down, why pay now for what will cost less later? THAT, sirs, if a far more rational assertion than “prices will ultimately be sustained by higher income growth.”

    Again, they are mistakenly treating a moral and psychological system as if it were a mechanical, natural, push and pull system.

    STewart

    • /self edit

      I shouldn’t say that there assumption is that people will pay “more” if simply beacuse they can; i should have said that the assumption is that people will continue to AT LEAST pay the current prices, simply because they can.

      Better!