Hot on the heels of recent reports from the Australian Population Research Institute and BIS Shrapnel warning of a “very messy” end to the apartment boom, AMP has joined other lenders and put more than 140 suburbs on a confidential ‘black list’ because of growing concerns about oversupply, off-the-plan sales, and, in some areas, falling prices. From The AFR:
“We have identified certain high density areas where we have put provisions in place to manage risk and over-supply,” a spokesman says. “We take a prudent approach to managing risk,” she says…
AMP borrowers will face tougher terms on the amount borrowed, number of apartments purchased in a single development and a ban on using some incentives offered by developers, such as rental guarantees…
An estimated 45,000 apartments are due for completion and settlement over the next nine months to Christmas in Melbourne, Sydney and Brisbane, an increase of nearly 25 per cent compared to last year, according to planning consultancy MacroPlan Dimasi.
Another 53,000 could be coming to market in the same postcodes next year, the consultancy estimates.
The black-listed suburbs include both popular inner-city locations such as Docklands and Southbank in Melbourne, as well as some further-out locations, such as Sydney’s Homebush and Arncliffe.
Honestly, who could blame AMP for being prudent? The apartment boom taking place in Melbourne, Sydney and Brisbane is like nothing ever witnessed before:
Who’d want to be left exposed when the inevitable downturn takes place?
