RBA's Stevens: “Yes, house prices can fall, even in China”
The pointed warnings from Reserve Bank of Australia governor Glenn Stevens on the housing market continue unabated. Stevens, speaking to a Committee for the Economic Development of Australia function in Adelaide, noted the dependence of the Australian economy – and the world's – on China as a trading partner. China's current effort to slow credit growth and moderate asset values has larger ramifications on the Australian economy than even its export figures or manufacturing pace, Stevens said. He warned, again, against a build-up of risk in the property markets while interest rates remain low. “...While we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that.” Read the full story here.
ANZ chairman David Gonski: a correction is coming
The housing boom has an expiration date, though no one feels comfortable naming it yet. ANZ's David Gonski warned the Australian British Chamber of Commerce yesterday that anyone who believes prices always go up “is, I think, a fool”. A correction is inevitable, he said. Housing prices have risen 16 per cent year over year in Sydney and 12 per cent in Melbourne after one of the strongest winters since the last financial crisis. Read the full story here.
What's the commission on a $32 million sale?
The estate of the late engineering magnate, Sir William Tyree, took two years trying to unload a mansion on Darling Point in the Sydney suburbs. But sell it he did, to yachtie Matt Allen for $32 million, only now it's the centre of a dispute over $850,000 in commissions allegedly owed to star real estate agent Bill Bridges and Christie's affiliate Ken Jacobs. Bridges says he introduced Allen to the property, and believes compensation is in order, while Sir William’s daughter, Robbie Fennell, said on behalf of the estate that they'll pay a commission “where there is a valid contractual arrangement to do so”. The knives are out. Read the full story here.
Property chiefs earn like bankers
One does not need to run a top bank to earn a compensation package like a top banker. The leading pay packages at big-name property firms earn compensation that would compete with CBA chief Dan Narev's $8.1 million or Westpac CEO Gail Kelly's $9.2 million. Westfield bosses Steven and Peter Lowy made $9.3 million and $8.77 million last year, managing a firm with a market capitalisation a tenth the size of one of the banking majors. Stockland chief Mark Steinert made $3.36 million. Steve McCann at Lend Lease earned $6.18 million. “Anyone who gets more than two or three million is overpaid,” said Australian Shareholders Association chairman Ian Curry. Read the full story here.
Money from Asia chasing apartment redevelopment space in Sydney
More than $1 billion in office towers at the southern end of the Sydney central business district are being scoped out by AMP Capital Wholesale Office Fund (AWOF) and Singaporean GIC Real Estate for redevelopment as apartments. Due diligence may lead to an offer on 175 Liverpool Street from GIC for close to $400 million, property executives said. Meanwhile, AWOF’s 338 Pitt Street is being discussed at $100 million for apartment redevelopment, now that a deal with a Chinese group has fallen through. Read the full story here.
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