According to a report by the Sydney Morning Herald, some real estate buyers are likely to be burdened by buyers who are likely to fail at settlement at the time of the transaction due to falling prices for apartments and land.
UBS's recent outlook has shown that Mirvac, Lendlease and Stockland were at high risk of collapsing colonies. This results from the companies' exposure to projects sold at the peak of the real estate cycle in 2017.
"We consider that Mirvac is the most at risk, followed by Lendlease and Stockland," said analysts Grant McCasker and James Druce.
Apartment sales account for a significant portion of Mirvac's results over the next three years. By 2020, nearly one-third of the group's income will come from settlements in Sydney and Melbourne, where apartment prices are down 7% and 2%, respectively.
UBS found that Marrickville and the Sydney Olympic Park were the most threatened projects. These properties "already seem overpriced" as the Sydney apartment price index has dropped 5% since launch, analysts said. Saint-Léonard could also become a problem if the values ​​were to fall by 5 to 10% more.
"We are less concerned about Lendlease's settlement risk given the price increases since the 2015-2016 launch dates," said McCasker and Druce.
Stockland, on the other hand, has little exposure to the apartment market, but derives most of its income from the sale of land for new home construction. With credit crunch, price declines, incentives and deposits, the number of distressed buyers could increase, which could be a problem for society.
Mirvac is the only company among the three to comment on the forecasts. "We are keeping a close eye on changing housing market conditions and it is important to remember that" average "price movements mask significant differentiation between sub-markets and housing types. We believe that our disciplined approach to replenishment, our commitment to design excellence, quality product and customer service will continue to differentiate us from others in the market, "said Stuart Penklis, Chief of the residential sector of Mirvac.
Whether you're looking to buy your first home, move, refinance or invest in real estate, a mortgage broker can help. Access loans from all major lenders, get help with paperwork – plus, this service is free. Get help from a local mortgage broker
Top suburbs:
Glendenning
,
Murdoch
,
Darlington
,
balga
,
West Rockhampton
Get help for your real estate investment
Do you need help in finding the right loan for your investment?
When you invest in real estate, it is important to make sure that you do not only have the lowest available rate that you can get, but you also have the features of ready adapted to your needs.
Just fill in a few details below and we will then do what is necessary for an Australian mortgage broker to contact you and establish a solution. What features or types of loans are suited to your needs? We will even help with the paperwork. In addition, an appointment is free.
We value your privacy and treat all your information seriously – you can check
our privacy policy here
