<a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic Property Group</a> has brought forward construction on Madeline by Mosaic, its $270 million, 37-level ultra-luxury tower in Broadbeach, after securing more than $175 million in pre-sales in just three months, the strongest off the plan result recorded on the Gold Coast this year.

Designed in collaboration with Fraser &amp; Partners and built by Mosaic’s in-house construction arm, <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-22-mary-avenue-broadbeach-qld-4218">Madeline</a> will comprise 59 whole- and half-floor residences, several spanning more than 400 sqm, on a site that secures one of Broadbeach’s last remaining protected ocean-view corridors. &nbsp;An extensive suite of health and wellness amenities, conceived to rival a five-star hotel, will further enhance the resident experience.

[smartcode_project:default project_id=150135 project_image_fid=3409]

Mosaic has rapidly expanded its Gold Coast presence, with <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-22-mary-avenue-broadbeach-qld-4218">Madeline</a> marking its 13th luxury project in just six years, an unprecedented run of delivery in one of the nation’s most competitive markets.

Marella by Mosaic in <a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> was completed earlier this year, with Lily by Mosaic, also in Broadbeach, on track for completion in late 2025. Sophia by Mosaic in Palm Beach and Isabel by Mosaic in Burleigh Heads are both advancing their building programs, taking Mosaic’s active Gold Coast construction portfolio to more than $800 million in combined project value. All projects are either sold out or nearing sell-out.

[smartcode_project:default project_id=150135 project_image_fid=3405]

Beyond the Coast, Mosaic is advancing a South East Queensland pipeline worth more than $2 billion, while already having delivered projects valued at over $2 billion.

Founder and Managing Director Brook Monahan said the success of Madeline is a testament to Mosaic’s ability to consistently meet the market through discipline, evolution, a commitment to quality and a customer-first mindset.

&nbsp;

[smartcode_project:default project_id=150135 project_image_fid=3406]

“Our entire model is built on delivering extremely high quality, assurance and certainty," Monahan says.

"We listen, we adapt, and we learn, and that is why our homes resonate so deeply, why our customers return and refer, and why our projects continue to sell out well ahead of completion. Something we continue to work hard towards maintaining and will never take for granted.

“Madeline brings together rare fundamentals, a prime, protected ocean-view site, generously scaled exquisite residences, no more than two per floor, and genuine design integrity. with the confidence that Mosaic will deliver exactly what we promise.”

Monahan acknowledged that while demand is strong, the construction environment remains highly challenging.

“There is no denying that costs, labour, and capacity are still under real pressure. But our integrated model gives us visibility and control across every stage of delivery, and that is how we continue to navigate those headwinds without compromise to quality or certainty for our customers.”

[smartcode_project:default project_id=150135 project_image_fid=3404]

He stated that in this environment, trust is a crucial factor for buyers.

“With so many projects delayed or withdrawn, buyer confidence has been shaken, and they are making a flight to certainty by rewarding developers with a track record of delivery. Madeline’s success is proof that when people trust the developer, they’re prepared to commit early and with conviction. We’ve never gone back to purchasers asking for more money, and that consistency, built on trust, integrity, and authenticity, is what sets Mosaic apart.”

Monahan, who was recently appointed Chairperson of Queensland’s Residential Tenancies Authority, said Mosaic’s growth has never been about chasing volume but about discipline and clarity of purpose.

“We don’t chase every site or every opportunity, we focus only on those that allow us to deliver enduring value. That discipline is why we’ve been able to grow without compromising quality. We don’t overpromise, we don’t cut corners, and we don’t walk away after completion. That consistency gives our buyers confidence, and it’s why they continue to back us.”

Madeline by Mosaic is expected to be completed in early 2028, with remaining residences priced from $3.5m.

[smartcode_project_cta:default project_id=150135]

Joel Robinson

Mosaic fast-tracks construction of Madeline by Mosaic after $175m sales blitz

PQD, a joint venture between Pomeroy Pacific and Quattro Corp, has unveiled <a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-148-152-riversdale-road-hawthorn-vic-3122">Kooyongkoot</a>, an exclusive collection of just 18 luxury residences, offering resort-style living on a scale rarely seen in boutique developments.&nbsp;

Located on Kooyongkoot Road within <a href="https://www.apartments.com.au/developments/hawthorn-vic-3122">Hawthorn</a>’s prestigious Scotch Hill precinct, Kooyongkoot brings together a mix of wellness and lifestyle amenities.&nbsp;Residents will have access to a private wellness centre, including infrared and traditional saunas, a massage and therapy room, cold therapy shower, a yoga and pilates studio, and a fully equipped gym.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355295]

Beyond wellness, <a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-148-152-riversdale-road-hawthorn-vic-3122">Kooyongkoot</a> features a curated suite of lifestyle amenities, from an immersive golf simulator with its own guest viewing lounge to a residents’ retreat designed for entertaining. Additional conveniences include a professional-grade car wash, dog wash station, 24/7 parcel lockers, and expansive private storage rooms for every resident.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355296]

"Kooyongkoot represents a shift in how boutique developments are imagined," said Mark Pomeroy, CEO of Pomeroy Pacific.

"We listened closely to what downsizers actually want – not just beautiful interiors, but lifestyle-enhancing amenities without the compromises of high-density living. This is not a project that was simply drawn and delivered. It is the product of dedication, discipline and a desire to create something truly enduring in Hawthorn’s most coveted precinct.”&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355298]

Designed by award-winning studio <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, the building blends sculptural architecture with refined materiality. Residences feature oak timber floors, natural stone finishes, V-Zug appliances, and extensive custom detailing throughout. Penthouses elevate the experience further, with private lift lobbies, three-meter ceilings, and rooftop terraces with private pools and panoramic views.&nbsp;

Light and airflow were central to the building's design. A four-storey central garden lightcourt draws natural light and fresh air into every corridor, creating openness and calm throughout. The 18 residences span four floors, with two dedicated lift cores providing discreet access and reinforcing a sense of privacy and exclusivity.

[smartcode_project:default project_id=102717 project_image_fid=355289]

"Designing Kooyongkoot was about achieving intimacy without sacrificing luxury," said Chris Stribley, founding partner at Cera Stribley. "We’ve created spaces that feel expansive, serene, and meaningfully connected to daily life. Wellness, convenience and calm were essential design principles from the beginning.”&nbsp;

Positioned within walking distance of parklands, private schools, Auburn Village and Camberwell Junction, Kooyongkoot offers a rare opportunity to reside in one of Hawthorn’s most tightly held residential enclaves, with the ease and amenity of true resort-style living.&nbsp;

The project is currently under construction, with registrations of interest now being accepted.

[smartcode_project_cta:default project_id=102717]

PQD unveils Kooyongkoot, resort-style living in the heart of Hawthorn

Builder–developer Deicorp has unveiled yet another new apartment development in Greater Sydney.

This time, they’re breaking into the booming Lower North Shore market for the first time with the launch of <a href="https://www.apartments.com.au/new-apartments/falcon-alexander-crows-nest-8-alexander-street-crows-nest-nsw-2065">Falcon &amp; Alexander</a>&nbsp;in Crows Nest.

Named after its location on the corner of Falcon and Alexander Streets, and within walking distance of the Crows Nest Metro, the development has been designed by Turner and will comprise around 212 apartments above a ground-floor retail precinct and a hotel, the latter increasingly forming part of Deicorp’s strategic development mix.

[smartcode_project:default project_id=135323 project_image_fid=351943]

The one-, two-, and three-bedroom apartments positioned around a central atrium and landscaped internal gardens. Higher-level residences will take in views toward Sydney Harbour, while interiors are framed by floor-to-ceiling glazing and finished with a mix of stone, timber and custom joinery.

In addition to the 140 private residences, 48 apartments will be delivered as part of an affordable housing component. A 100-room hotel will occupy the southern corner of the site, with residents accessing a private rooftop garden, dining room, and wellness spaces. Ground-floor activation will include space for cafés and small-scale retail.

[smartcode_project:default project_id=135323 project_image_fid=351927]

Deicorp founder Fouad Deiri said the project marks a new step for the group’s portfolio.

“This is a community we deeply respect, and we’re proud to contribute with a project that reflects the character, energy, and potential of <a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a>,” Deiri said.

“This is an iconic location, and a great location deserves a great design. With Falcon &amp; Alexander, we’re delivering more than just apartments; it will be a new landmark for Crows Next that not only delivers housing but will benefit the community with an activated retail offering."

[smartcode_project:default project_id=135323 project_image_fid=351931]

Deicorp went through several design iterations for Falcon &amp; Alexander, clearing hurdles with both the local council and State Government to get the project to where it is now.

The builder–developer has already commenced construction on the building, one of several Deicorp is delivering across Sydney. The company currently has more than 2,000 apartments under construction, with plans for thousands more in the pipeline.

[smartcode_project_cta:default project_id=135323]

Deicorp launches Falcon & Alexander, Crows Nest apartments

Gold Coast developer <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a> has made a strong market debut in Brisbane by selling nearly three-quarter of its recently launched South Brisbane apartment development, Symphony.

Sherpa fielded over 3,000 expressions of interest for the development which forms part of Sherpa's burgeoning Flourish brand, aimed at offering a more affordable entry point for first home buyers than what else is on the market.

<a href="https://www.apartments.com.au/new-apartments/symphony-south-brisbane-21-23-cordelia-street-south-brisbane-qld-4101">Symphony</a>, proposed for a prime 1,366sqm site at 21–23 Cordelia Street in <a href="https://www.apartments.com.au/developments/south-brisbane-qld-4101">South Brisbane</a>,&nbsp;will deliver 138 apartments across 25 levels, with 25 of the apartments priced under $1 million.

[smartcode_project:default project_id=7574 project_image_fid=5155]

“The affordability that Symphony presents to residential property buyers has created a remarkable level of enquiry for what we believe is a standout project for the South Brisbane market,” said Sherpa Group founder Christie Leet.

“The Flourish brand has been highly successful for us on the Gold Coast, and it’s evident that Brisbane buyers are equally drawn by the quality and amenity that Symphony offers in one of the most vibrant inner-city locations.”

[smartcode_project:default project_id=7574 project_image_fid=353550]

Sherpa Group has been among the most prolific developers on the Gold Coast in recent years, undertaking 15 projects since 2018.

The company has currently seven projects in Palm Beach, with four of them under the Flourish brand that is delivering affordable beachside luxury for one of the most undersupplied markets on the Gold Coast.

Symphony, which is positioned at the junction of South Bank, West End, and Fish Lane, is located in the heart of Brisbane’s entertainment, dining and leisure precinct. The location also offers exceptional walkability to QPAC, galleries, riverside parklands, the CBD, major universities, hospitals, and transport hubs.

“As our first development for the Brisbane market, we saw this precinct as a strategic location for Sherpa to deliver attainable housing in one of Brisbane’s most connected and culturally vibrant neighbourhoods,” added Leet.

“Our vision for each project is always founded on a sense of community, which is why we have ensured that locals who already know and love this area were prioritised during the early release of Symphony residences.”

[smartcode_project:default project_id=7574 project_image_fid=351653]

Symphony has attracted strong interest from a range of buyers, including first home buyers, downsizers, local owner-occupiers, and investors.

Building on a solid reputation where 100 per cent of projects have been successfully delivered on the Gold Coast, Sherpa Group enlisted architectural firm HAL to design Symphony - envisaging an "architectural gem with activated street frontage and an array of amenities to rival five-star resorts."

Symphony features an expansive rooftop wellness and recreation area spanning more than 1,400 sqm across two levels, with all amenities designed to foster community, connection and wellbeing among residents.

The rooftop will comprise a heated pool, steam room, saunas, and hot and cold plunge pools; work from home spaces, private treatment room, pool deck cabanas and private outdoor BBQ areas; a private dining room and residents’ lounge; a fully equipped gym and yoga studio; and panoramic views of the Brisbane skyline and Mt Coot-tha.

Symphony buyers are given access to a full-time concierge service to provide off the plan assistance and construction updates; hard-hat tours during construction; and post-settlement move-in and appliance induction support.

[smartcode_project_cta:default project_id=7574]

Sherpa locks in $240m of sales at debut Brisbane apartment development Symphony

The well-trodden path to development on the Gold Coast typically involves taking an underutilised site, either a vacant block of land or an ageing low-rise apartment building, and turning it into something new and shiny.

Growing Gold Coast developer <a href="https://www.apartments.com.au/developers/polycell-group">Polycell</a> is taking a different approach. While they are indeed targeting underutilised assets, their focus is on redeveloping existing buildings, specifically ageing holiday resorts.

Polycell’s next project to launch will be the <a href="https://www.apartments.com.au/news/qld/first-look-exclusive-polycell-files-sandpiper-redevelopment-plans-after-owner-buyout">redevelopment of Sandpiper on Old Burleigh Road</a>. The existing 12-level building will make way for a <a href="https://www.apartments.com.au/new-apartments/sandpiper-broadbeach-155-old-burleigh-road-broadbeach-qld-4218">new 52-level tower</a> comprising around 200 two- to five-bedroom apartments. The lower portion of the tower will feature six apartments per floor, while the upper levels will offer a selection of larger residences.

This comes on the heels of their recent approval for the redevelopment of The Voyager Resort, also on Old Burleigh Road, where the 1997 timeshare building will be replaced with a 59-level tower.

Polycell’s debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/the-rochester-broadbeach-143-surf-parade-broadbeach-qld-4218">The Rochester</a>, was a more conventional acquisition. They purchased the Vaucluse block, which was easier to redevelop due to the small scale of the original walk-up apartment complex.

Much like The Rochester, Sandpiper will demonstrate Polycell’s commitment to high-level resident amenity. The building will offer three levels of dedicated facilities. The podium level will include a lap pool with floating daybeds, a communal kitchen, dining and lounge areas, a gym with a yoga room, a games room with a golf simulator, and a wellness zone with a spa, hot and cold plunges, and a sauna and steam room.

Levels 33 and 34 will host a residents’ club featuring similar amenities alongside meeting rooms, a two-level club lounge with a spiral staircase, a wine room with adjoining private dining spaces, a library, and a cinema.

Polycell is continuing its strategy of repositioning ageing holiday resorts. Their latest play is on Queensland Avenue, where they’ve been quietly acquiring apartments in the Barbados Holiday Apartments. The early-1980s building sits opposite Federation Park, midway between the beach and the Gold Coast Exhibition Centre.

The developer will no doubt be planning something in line with its three other projects, which together would push Polycell’s total apartment count toward 1,000 since entering the local market in 2023.

Exclusive first look: Polycell ramps up Broadbeach holiday resort buy-up

<html><body>
The accelerated drop in home loans has prompted UBS analysts to downgrade their peak-to-trough forecast of home prices from a fall of 10 per cent to now 14 per cent.
"We cut our peak-to-trough forecast of home prices from falling '10% or more if regulators don't ease', to dropping '14%, even assuming the RBA cuts' (with Sydney and Melbourne closer to 20%), UBS analysts George Tharenou, Carlos Cacho and Jim Xu said.
"This is double the -7% decline so far."
They said they expect the RBA to cut rates in November.
The change in forecast comes after home loan approvals and values dropped to GFC levels in December.
The December 2018 slump for home loans approved, which was -5.9% month on month, was the worst since decline the GFC. UBS had predicted a -3% decline.
The -19.8% year on year figure was the worst since the GFC.
"The accelerating fall in home loans shows tighter credit is playing out," the UBS report stated.
"Looking ahead, while the Royal Commission didn't make material changes, we downgrade out long-held forecast peak-to-trough drop in home loans from '20% with risk of 30%' to '25% with rising risk of 30%.'"
They said it would mean housing credit growth will likely slow to 2% year on year by 2020, with risk of flat.
Click here to enlarge.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/UBS.jpg" alt="">
Investor lending slid another 4.6% month on month to be 27.8% down year on year. 
Despite holding a 16% share of total loans, the highest since 2012, first home buyers retracted sharply, down 8% month on month and 12% year on year.
Owner occupiers also weakened, down 6.4% to be 16.2% down year on year.
 
 
 
 
</body></html>

jrobinson-rf4aSBido9

UBS analysts change home price forecast after home loan drop

<html><body>
Housing prices could fall 10 percent as banks crimp riskier lending and the ALP plans to limit negative gearing tax breaks, warns UBS.
The global financial services firm has suggested the number of home loans could drop 30 percent due to credit tightening.
They said the economy could be set for a record long house price downturn.
"We expect further credit tightening, and the RBA’s lack of willingness to cut rates this time, to see the longest house price downturn in decades," the bank advised.
UBS have suggested the risks are now "tilted to the downside", having previously predicted the value of home loans written could drop 20 percent and housing prices could fall 5 percent.
They now expect home loan falls of up to 30 per cent and price drops of up to 10 per cent.
“Positively, the economy and labour market remain solid for now,” UBS noted.
They said borrowing capacity could reduce by around $100,000 for many households with new comprehensive credit reporting rules from mid next year.
Credit card limits and other debts could be taken into account.
National dwelling price to income ratio is near a record high of about 6.5 times. It's around nine times in Sydney and eight in Melbourne. 
Researchers George Tharenou, Carlos Cacho and Jim Xu said the federal opposition’s plan to limit negative gearing tax concessions for future purchases to new housing and halve the capital gains tax concession to 25 per cent.
Moody's recently suggested more borrowers will fall behind on their home loans in 2019.
 
 
 
 
 
 
 
</body></html>

j.ballantyne1990-6AQqhLzZaK

Housing prices could fall 10 percent warns UBS

<html><body>
Imminent restrictions on lending to heavily indebted borrowers will accelerate a squeeze on borrowing, according to UBS analysts.
UBS has repeated its warning of a potential credit crunch in the Australian economy where house prices would likely fall over a prolonged period across a few years.
This is because the price of money [via record low interest rates] becomes less relevant compared with the supply of money [credit availability] or demand for money — that is through employment, income, population," UBS economist George Tharenou said.
This week he noted about 30% of outstanding mortgage debt was held by borrowers with debts more than six times their income, which meant the flow of total lending going to borrowers with debt-to-income levels of more than six times would previously have been greater than 30% of lending.
Westpac advised recently that the share of loans on the bank’s books with a debt-to-income ratio above six times was about 20%.
UBS suggested this could be well above the new limit required by APRA.
“We expect boards, shareholders and management teams to recommend ‘very high’ debt-to-income be a low 5 to 10% of new lending flow,” Tharenou said.
“The impact of even a generous limit of 20% would likely be a negative for lending growth and credit availability.”
It is the latest warning from the UBS analysts of a potential credit crunch in the wake of the early evidence presented to the royal commission into banking and financial services, 
“This means that the introduction of debt-to-income limits will likely make borrowing for the median home in Australia (let alone Sydney or Melbourne) even more challenging,” Tharenou told The Australian.
He said restricting the amount of credit going towards borrowers with lower incomes could drag house prices in Sydney and Melbourne lower, as loan sizes would no longer support high house prices.
“Even taking into account higher household income in Sydney and Melbourne along with a 20% deposit, on our estimates the median household in Sydney will only be able to afford an $800,000 property, still well below the median house price,” Tharenou said.
UBS's George Tharenou said the credit crunch scenario would clearly be unintended by regulators and policy makers.
A tightening of access to credit for heavily indebted borrowers would also crimp the ability for property investors to enter the market. About 20% of investors own two properties, and 10% own three or more. About half of all investment properties are owned by investors with multiple properties.
“Limits could well spell the end of widespread multiple property investing in Australia — at least for those investors who maintain an owner-occupier mortgage and geared investments,” Tharenou said.
 
</body></html>

jchancellor-FAypfDUnLy

UBS see heavily indebted borrowers squeezed in pending credit crunch

<html><body>
<div class="cq-article-content-paras section">
The ailing food franchisor Retail Food Group may close more than 400 stores over the next three years, according to a report by UBS.
The investment bank slashed its earnings forecasts for Retail Food Group after factoring in shrinking sales from store closures.
UBS analyst Jordan Rogers believes RFG may need to close as many as 456 stores in Australia between 2018 and 2020, mainly in its bakery division, which includes Donut King, Michel's Patisseries and Brumby's Bakery, and its quick service restaurants divisions, which owns the Crust and Pizza Capers brands. 
This doesn't include about 200 outlets forecast to close in 2018, the Australian Financial Review article noted.
</div>
<div class="cq-article-content-paras section">
Store closures in Australia would be partially offset by about 145 new stores and outlets overseas, taking total stores to 1984 by 2020. However, RFG is unlikely to reach its long term target for 3500 stores.
</div>
<div class="cq-article-content-paras section">
RFG shares have fallen 44 per cent since Friday, when the franchise systems business announced plans to close between 160 and 200 outlets over the next 15 months.
UBS believes more closures will be necessary before RFG reaches a sustainable base.
​"We expect the closures to accelerate and go beyond those initially identified by RFG given the deterioration in underlying performance and pressure with the Michel's structure, in particular,"  Mr Rogers said.
</div>
<div class="cq-article-content-media section">"A successful repositioning of Michel's and deceleration of closures would be the most likely potential change to our view, but it is difficult to have confidence in this scenario after network sales fell 22 per cent in (the December-half)," he said,</div>
<div class="cq-article-content-paras section">
"We now forecast about 460 net outlet closures over the next 2.5 years (36 per cent closure of current domestic portfolio partially offset by about 100 net openings in the international division) and have lowered margins in each division to account for an expected change in the value split between RFG and franchisees."
</div>
</body></html>

Retail Food Group may close 456 stores: UBS

<html><body>
<div>
Chinese property investors are choosing Bangkok over Sydney and London, according to UBS.
Chinese buyers of property abroad tend to fade or pick up depending on key factors, UBS head of global real estate Kim Wright said.
“What we have found is that Chinese buying of property abroad tends to be very price and currency-aware,” Wright told The Australian.
“Their focus on specific markets will fade or pick up, depending on their view of currency. Over the last two years we have seen Asian buying of Australian property, specifically Sydney, Melbourne and Brisbane, that’s been very strong. It looks like that has started to fade over the past six months.
“I think it’s the combination of factors. Prices have been very strong in Australia so there is now a discussion that the cycle has started to peak and there’s the tax changes that have come through along with the tax controls.”
Wright suggested the decline in demand for property in Australia among Chinese buyers was similar to a loss of interest in London property in late 2015 when buyers felt the market had peaked, while tax changes and tighter capital controls further put them off.
Wright told the recent UBS Greater China conference in Shanghai that their research suggested tighter capital controls were just one factor.
Half those said the controls had encouraged them to bring forward purchases while the other half said it would slow their buying.
</div>
<div>The UBS research also found that two thirds of property purchases were cash settled.</div>
<div> </div>
<div>Wright suggested that Chinese property investors were now looking to Bangkok, Thailand, as a new market.</div>
<div>
"I am not sure if that's a function of the One Belt One Road initiative and people are seeing the infrastructure spend and the co-operation, but also the price point is pretty attractive."
</div>
<div>
The Shanghai conference addressed efforts by Chinese authorities to reduce private sector debt levels and put the economy on a sounder footing without severely impacting growth, or triggering a financial crisis.
"A Minksy moment will not come in China. The debt problem is not going to result in a sudden collapse," said UBS head of Asian economic research Wang Tao.
Dr Wang said data that showed that China's foreign exchange reserves had actually increased was a "pleasant surprise" particularly in the context of fears last year that sustained outflows would deplete reserves and weigh on the currency
</div>
<div>
She is forecasting slower economic growth of 6.4 per cent in 2018 and 6.3 per cent in 2019 compared with the 6.8 per cent achieved in 2017.
</div>
 
</body></html>

Chinese cooling on Australia property sees cash heading to Thailand: UBS

<html><body>
<div id="story-description">
The Brisbane apartment market is seeing one in five foreign buyers fail to settle, according to investment bank UBS.
It comes as tighter capital controls are imposed in China.
</div>
UBS said default rates for top east coast developers remained low in light of residential price growth being strong for many of the buyers who purchased off the plan two to three years ago.
These buyers had a strong incentive to settle.
But the research highlighted the Brisbane market as where foreign buyers were not necessarily in the money.
The Brisbane apartment market has been the subject of recent warnings from the Reserve Bank after strong supply concentrated in inner city areas.
“The Brisbane apartment market is overbuilt in our view [with] residential prices largely tracking sideways for the last two years,” UBS analysts led by Kim Wright wrote.
“Resale prices are 10 per cent or more below purchase price and bank valuations are frequently below the initial purchase price.
“Poor quality projects are under significant pressure and we understand one in five foreign buyers aren’t settling, citing tightened capital controls.”
Listed developers Mirvac and Lendlease only had a small exposure to Brisbane apartment completions, UBS said, but flagged continued focus on the issue.
“We will be watching the market closely and also to provide an understanding of how foreign buyers will react if prices in Sydney and Melbourne also softened.”
More broadly, UBS said most Chinese consumers around the world had been financing their global property purchasers with cash or mortgages from Chinese banks, reducing concerns about settlement risk.
About a third of buyers paid cash using their savings and nearly three in 10 paid cash with help from family and friends.
Of the one-third of buyers who borrowed, 85 per cent used a Chinese bank rather than a local bank.
The research comes from a survey of 3,060 Chinese consumers that found an increasing trend in mainland Chinese ownership of global residential property.
The survey found around 14 per cent of properties purchased by Chinese consumers were bought for investment and left vacant, a figure that had fallen over the past six months.
Another 26 per cent of properties were used by their owners only part of the time, perhaps for holidays, business or to visit family.
“As much as 40 per cent of the overseas property owned by mainland Chinese may not be fully utilised,” UBS said.
“This may have ramifications for the vibrancy of the surrounding retail space and amenity of the area.”
Roughly a quarter of the purchasers live in their property full-time, while more than 40 per cent bought investment properties and rented them out.
</body></html>

Brisbane foreigner OTP apartment defaults at one in five: UBS

<html><body>
Just months after UBS called the top of Australia’s property market, the investment bank has now declared the housing boom is “officially” over.
In the wake of the latest home price figures for October, its economists forecast a “persistent and sharp slowdown” unfolding in response to lending restrictions and out-of-cycle mortgage rate hikes.
The weakness in auction clearance rates, and the near flat month-on-month growth in prices in the last five months, "suggest the cooling may be happening a bit more quickly than even we expected.”
UBS expects the Reserve Bank of Australia to keep the official cash rate on hold until the second half of 2018.
CoreLogic’s latest monthly read on home values found price growth was flat nationally during October and up just 6.6 per cent annually — the weakest pace of growth since 2016.
Values fell half a per cent in the nation’s biggest housing market, Sydney.
“This is broadly consistent with our housing deep dive ‘calling the top’, which forecast a moderation to 7% year-on-year by end-2017, before dropping further to 0-3% year-on-year in 2018,” UBS economists George Tharenou and Carlos Cacho said.
Now the duo have downgraded their growth forecasts for this year to just 5 percent.
“Australia’s world record housing boom is ‘officially’ over after a large ‘upswing’ of 6556% price growth in 55 years,” he says.
<div id="taboola-mid-article-stream-thumbnails" class=" trc_related_container trc_spotlight_widget">“After dwelling price growth was resilient at a booming 10% [plus annual] pace earlier this year, there is now a persistent and sharp slowdown unfolding."</div>
</body></html>

UBS calls property boom over and lowers national price growth forecast from 7 to 5 percent

<html><body>
<div class="cq-article-content-paras section">
Australia's national house price growth is likely to be flat - or possibly in low single digits - for the several years, according to UBS.
The latest UBS report, 'Get rich or borrow trying', warns that even small changes to credit conditions, such as a drop in availability of investor-only loans which have been targeted by the bank regulator, will "materially impact" house price growth.
According to UBS households are much more sensitive to tightening financial conditions from higher mortgage rates and the lagged impact of macroprudential measures than many realise.
</div>
<div class="cq-article-content-media section">House price growth should moderate to around 7 per cent in 2017 and to between 0 per cent to 3 per cent in 2018, according to UBS economists George Tharenou and Carlos Cacho.</div>
<div class="cq-article-content-media section"> </div>
<div class="cq-article-content-media section">But the “forever boom” is ending, UBS clients were told, according to The Australian.</div>
<div class="cq-article-content-media section"> </div>
<div class="related-quotes section">"We would still characterise our outlook as a 'soft landing', given we still don't expect a sudden collapse in prices," they wrote in a report on Fairfax Media.</div>
"But it does seem likely that Australia faces a prolonged multi-year period of flat or low single digit nominal price growth." 
Signs of a slowdown in house price are fast-emerging. House prices in Sydney fell 0.1 per cent over September, the first fall since late 2015, on Corelogic figures and 1.9 per cent, on Domain figures.
Veteran analyst Louis Christopher is predicting sedate house price growth in Sydney of between 4 per cent to 8 per cent in 2018 if the cash rate and economy remains unchanged. 
</body></html>

Australian property prices headed for "prolonged" flat period: UBS 

<html><body>
A third of customers with interest-only home loans may not properly understand the product and could end up in stress once they start paying back the principal, according to investment bank UBS.
Typically, a borrower has to pay only the interest component of a loan when he takes out an interest-only loan for the first five years. After that, monthly payments go up as the borrower also starts paying back the principal.
The new analysis by UBS concluded that borrowers would be exposed to financial stress once their monthly payment jumps. 
The findings are based on a survey the bank conducted between July 7 and August 4 this year seeking responses from borrowers who took out a home loan within the previous 12 months.
UBS found only 23.9 per cent of 907 respondents had an interest-only loan, compared with economy-wide figures that show 35.3 per cent of loans are interest-only, Fairfax Media reported.
Lead analyst Jonathan Mott noted that he initially suspected the survey sample had an error, but now believed a "more plausible" reason was that interest-only customers did not properly understand their loan.
We are concerned that it is likely that approximately one third of borrowers who have taken out an interest-only mortgage have little understanding of the product or that their repayments will jump by between 30 and 60 per cent at the end of the interest-only period (depending on the residual term)," he was quoted by Fairfax Media as saying.
UBS quoted surveys by ME Bank to show many Australians have an apparent lack of financial literacy and understanding of home loan products, with 38 per cent admitting they had "no understanding of interest-only repayments".
He also cited a 2014 Standard &amp; Poor's report that said 64 per cent of Australian adults were financially literate, implying 36 per cent were not.
The survey follows another one by UBS which revealed that there were $500 billion of “liar loans”, meaning they were written based on inaccurate information provided by borrowers in their application.
UBS said that over 70 per cent of survey respondents that took out an interest-only loan said they were "under moderate to high levels of financial stress".
"While these loans are well secured, we believe many borrowers may face substantial stress as interest rates rise or when they revert to principal and interest," UBS wrote.
UBS pointed out that mortgage misselling and irresponsible lending could have contributed to the problem.
The survey also suggested that borrowers would cut their spending (50 per cent) or begin paying down principal (24 per cent), once the higher payments start.
It also noted that the moves by the banks to increase interest rates on interest-only mortgages provided a "substantial" boost to their margins.
Interest-only loan rates have increased by an average of 74 basis points for investors, to 6.26 per cent and 49 basis points for owner occupied borrowers over the last 12 months to 5.78 per cent.
It comes as banks have responded to regulators asking to restrict interest-only loans to 30 percent as the property sector is increasingly being seen as a risk to the economy.
</body></html>

jonathanchancellor-7SQnKwU6yx

One in three interest-only borrowers don't understand their loans: UBS

<html><body>
Investment bank UBS’s latest report saying ‘liar loans’ have reached $500 billion has met with strong opposition from a brokers body.
The Finance Brokers Association of Australia (FBAA) said in a media release that UBS was being reckless with its analysis of so-called ‘liar loans’ because it is based on implied presumptions.
UBS said that its latest survey of over 900 mortgage applications originated over the last 12 months revealed that about one third of home loans contained information that was not accurate.
Meanwhile, Australian Securities and Investments Commission chairman Greg Medcraft has said that a broken mortgage broker remuneration model and loose lending could trigger a subprime mortgage crisis.
Medcraft irresponsible lending is facilitated because of the mortgage broker remuneration model which rewards brokers for securing larger loans for their clients.
Referring to the UBS report, FBAA executive director Peter White said the figure was based on interpretation of their own research and asked the data be justified.
“I want to see their data analysis,” said White. “We need to see the questions they asked participants and we need to know how much and under what conditions they were paid.”
“UBS must prove there is no steering of answers or influences to produce outcomes which are not factual or fair or commercially sound,” he added.
White also questioned the validity of the data, saying UBS is not a lender in the home loan space, so there “needs to be clear transparency of their supposed results”.
“This is not their data and not data from a bank/lender, so the question must be asked as to the accuracy and integrity of the research, which is fundamentally divorced of market broker and lender marketplace data.”
 
</body></html>

Ubs

Editor's Picks

Have something to contribute?

The latest real estate & off the plan properties & news, delivered to your inbox.

Developments

New apartments

New townhouses

News

The latest real estate & off the plan properties & news, delivered to your inbox.

Ubs

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

The latest real estate & off the plan properties & news, delivered to your inbox.

Developments

New apartments

New townhouses

News

The latest real estate & off the plan properties & news, delivered to your inbox.