I imagine we had better get used to a renewed torrent of McGrath spruiking now that he’s gone public, not least because he appears to be so cordial with a number of Domainfax journalists:
Chinese demand, which helped propel a surge in Australian home prices, has dropped as much as 15 per cent in the past year as China’s stocks tumbled and the economy slowed, real estate agent McGrath says.
Buyers from mainland China are turning away from Sydney and Melbourne and looking at southeast Queensland where home values are “compelling”, John McGrath, chief executive officer of the eponymous company, said after it debuted on the Australian share market on Monday. The shares closed 12 per cent lower at $1.94 compared with the issue price of $2.10; the IPO raised $129.6 million.
Sydney and Melbourne prices are at the end of the “growth cycle”, McGrath said. After running up 47 per cent in the three years ended October 31, sending the value of an average Sydney house to about $1 million, home prices in the city dropped 1.4 per cent in November, the biggest decline in at least five years. Successful auctions also dropped to a three-year low in Australia’s most-populous city as record prices put off buyers.
Chinese buyers “are still there, but it is probably back 10 or 15 per cent from where they were a year ago”, Mr McGrath said. “I think there is a whole combination of things there. The Chinese stock market and so forth.”
Given the degree of global pullback we’ve seen in this bid in the US, UK, NZ, Canada and even HK, I think the -10-15% numbers is being very conservative. I look forward to more McGrath selling today.
