PRESS

Asians and especially Singaporeans including groups like CapitalLand are significant property owners in Australia.  China is also a major player in commodities in Oz,   - 太太

• Centro's $4 billion debt
• Asian takes 11.8% stake in Centro

Australia housing market softens 
Looking ahead, analysts expect prices to flatten out and remain stagnant for a number of years

It was not just the rich who were getting super-rich, values of their multimillion-dollar homes with water views rising faster than a tsunami. Every homeowner was making money, at least on paper, and Australia is a country with one of the highest levels of home ownership in the world. A midlevel office worker, for example, who bought a house in a middle-class Sydney suburb for A$188,000 (S$236,000 at current rates) in 1996 was offered A$720,000 in 2003.

Sound familiar? As in many regions of the United States these days, house prices here seemed to defy gravity. They just kept going up and up and up - in Sydney, by 11 per cent in 1997, according to the Real Estate Institute of Australia, followed by a leap of another 21 per cent the next year. After more modest increases, prices rose by 16 per cent in 2002, and another 23 per cent in 2003. It was similar in other major cities.

'It overshot all models, all predictions,' said Rod Cornish, head of property research at Macquaire Bank.

Indeed it did. In the last two years, though, the Australian housing boom has come to a halt, in a move that many experts see as the first signs of the end to a housing bubble, not just in Australia, but also in the United States as well as several other rich countries around the world.

It is impossible to say for sure how the situation will work out here - or in the United States, for that matter. But so far, despite predictions that housing prices in Australia would plummet by as much as 20 per cent to 30 per cent, there are no signs of a crash here. Prices have levelled off noticeably or dropped slightly, at least in Sydney, Melbourne and Canberra. They continue to rise at a modest rate in Perth, Darwin and Brisbane, the major cities in resource-rich states, where the local economies are being buoyed by China's insatiable demand for raw materials.

Nationwide, for the year ending on March 31, the rise in house prices was 0.4 per cent, the lowest since 1996, according to the Australia Bureau of Statistics.

'It's been an orderly correction,' said Mark Steglick, managing director of Gowings Properties, a Sydney property development company, who said that there had been few foreclosures or forced sales since the boom ended. 'There's no blood on the streets.'

Looking ahead, local housing experts expect prices to flatten out, perhaps remaining stagnant for a number of years to allow gradually rising incomes to catch up with the sharply higher level of home values.

But there are significant differences within the market that may provide some clues as to how housing booms elsewhere could run out of steam. Prices for investor-owned apartments have fallen considerably more than for owner-occupied houses. Nationwide, prices are down about 10 per cent from the peak.

The most expensive homes, particularly those along the coast, have held up better than the rest of the market. 'My jaw drops at some sales,' Mr Steglick said, describing a house in Vaucluse, a posh Sydney suburb, that recently sold for US$17 million. The home does not even have direct access to the beach, though it does have spectacular views of the soaring Opera House and of the Sydney Harbour Bridge. It last sold in 2001 for US$12.1 million.

Australia is no stranger to booms and busts in housing prices. The latest boom began in the mid-1990s, following a bust brought about by the recession of 1990, one of the worst in Australia's history, and far more severe than the downturn in the United States at the time. Unemployment soared to more than 10 per cent as interest rates reached as high as 17 per cent.

Those high rates knocked many potential buyers out of the market, but even more importantly, they also saddled many existing homeowners with a greater debt than they had assumed when they took out their loan.

House financing here differs significantly from the United States, where the 30-year fixed-rate mortgage has been the norm and most adjustable rate mortgages delay rate increases for several years and then limit them to set annual amounts. In Australia, fixed rate mortgages are very rare. The standard mortgage is a variable, with the rate rising automatically whenever the central bank raises interest rates.

So someone who borrowed at 12 per cent in 1985 found that his monthly mortgage payments had gone up by nearly 50 per cent five years later, when the rate was just over 17 per cent.

There was 'blood on the streets' then, with thousands of foreclosures and forced sales. - NYT     6 July 2005

(SYDNEY) FOR several years, dinner party chatter here did not linger on favourite Australian subjects like rugby, cricket, sailing and surfing or even politics. No, all the talk was of real estate: how much a house was worth, how much more this year than last, and how much more valuable it would be next year.

Housing market about to burst
There must have been a groan of disbelief at Australia's central bank yesterday when data showed a staggering 23 per cent leap in August building approvals despite the housing market bubble already being seen as fit to burst.   - 01 October 2002   South China Morning Post

A million Chinese set to visit Australia:  state leader  
A million Chinese were expected to visit Australia each year from 2010, Chinese number two Li Peng was told here Friday at a reception in the north Queensland town of Cairns. 

Queensland Premier Peter Beattie said talks were underway with two Chinese airlines for extra flights to Australia.

The state government was negotiating with China Southern Airlines and China Eastern Airlines, he said. 

China was Australia's fastest-growing inbound tourist market.

"We also look forward to November when the newly-launched Australian Airlines will begin flying Chinese tourists into Cairns from Hong Kong," Beattie said.  

Australia had become one of the first western nations to achieve Approved Destination Status in China.  

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