Australia’s apartment sector may soon hit a bumpy period, but the wider property market is not at any real risk of a widespread housing bubble, according to one of the mortgage industry’s biggest names.
According to a report in The Australian
, Aussie Home Loans founder John Symond believes the Australian property market is relatively healthy, outside of concerns around off-the-plan apartments.
“I don’t believe there’s a housing bubble risk at all. I’ve been saying that for 10 years since the GFC,” Symond told The Australian
“I think there’s going to be a temporary concern of oversupply of apartments in certain regions only,” he said.
Symond’s concerns echo recent warnings raised by the Reserve Bank of Australia about the health of the apartment market.
While construction in the apartment sector has been strong of late, Symond said much of the concern about oversupply stems from the decision of numerous Australian lenders cut off finance to foreign buyers.
“You can talk to any developer of high-rise and they will tell you up to 50 per cent of presales are to Chinese sign-ups. The fact is that’s stopping with a thud,” Symond told The Australian
While over-exposure to the apartment market and foreign buyers was sighted by lenders as the reason to shut their books, others also had concern about widespread mortgage fraud.
There could be some positives from the situation however, with Symond saying the drop off in foreign investors could lead to apartment projects being shelved, which will help to minimise concerns.
“There won’t be as many new developments happening and … some of those projects will take a hit on expected sales price by ambitious developments … The end result will be a more healthy housing market,” he told The Australian
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