Channel checks indicate apartment rebates have moved to >10%. Feedback from our Australian Property Conference and mystery shopping highlight a clear change in the apartment market, particularly so in Perth, Brisbane and to a greater extent in Melbourne. A tier 1 developer is now offering a 5% 12-month rental guarantee plus stamp duty ($25k) plus an A$11k furniture package on a 1bd apartment with a $495k list price (prior to 30 June), all up a 12% rebate.
Tightening lending conditions starting to bite. Compared to 12-24 months ago (when pre sales growth was strongest), LVRs have moved from 80% to ~70%, interest only lending (~50% of the flow) has been choked as the regulator wants this <30%, foreign restrictions have been tightened, and interest rates are up 50-100bps (product dependent) despite the RBA being on hold.
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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.
