Suddenly, ending the apartment boom is good?

Thursday 6 August 2015

From the AFR:

The tightening of credit by big banks for apartment developers will prevent an oversupply in the residential market, which might have ended with crashing values, Deloitte Australia’s real estate practice says.

The Commonwealth Bank of Australia has tightened its lending to apartment developers as new capital requirements could increase the failure of buyers to finalise off-the-plan apartments, raising the riskiness of such projects.
However, Deloitte’s national director for real estate James Walsh said tightening by banks would help ensure the health of the development sector.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.