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Millionaires' row going, going ... gone

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  • Millionaires' row going, going ... gone

    Problems in the land of the sun.

    Millionaires' row going, going ... gone

    Turi Condon and Lex Hall | February 21, 2009

    Article from: The Australian
    ALONG the country's wealthiest coastal strips and in its most exclusive suburbs, the collateral damage from the credit crisis is piling up.
    Three of the sprawling mansions on Hedges Avenue, the beachfront Gold Coast street known locally as "millionaires' row", have "contract default" or "mortgagee sale" stamped across their marketing advertisements on the internet. At least another three are listed as "urgent sale", or "owner meets the market".
    "Live the dream", the catchcall of Hedges Avenue real estate, is scattered more frugally through the ads of the 20 mansions and upmarket homes listed for sale on realestate.com.au.
    On Sydney's exclusive northern beaches, there have been dramatic reductions in house prices. One home on Ocean Road, a premier Palm Beach location valued at $17million three years ago, recently sold for $12 million, according to real estate agents.
    Around the country, prestige property prices have fallen up to 20 per cent in the hardest-hit luxury suburbs, with most of the falls happening in the latter part of last year, according to figures compiled for The Weekend Australian by property researcher RP Data.
    In Vaucluse, in Sydney's east, the value of homes sold fell 22.2per cent in the three months to November 30 compared with the previous quarter, Perth's Peppermint Grove was down 10.6 per cent, while prices in Sydney's Mosman and Palm Beach, Queensland's Noosa Heads and Victoria's Portsea dropped between 1 and 4 per cent over the period.
    Despite the mortgagee offerings, the Gold Coast's Mermaid Beach bucked the trend, with prices rising 12.1 per cent for the quarter, RP Data found.
    At a suburb level, one or two very big sales can move prices dramatically.
    For those homes on the sales block, the average listing price in Mermaid Beach is falling, down from $1.65 million in the September quarter to $1.49 million in the following three months, according to RP Data senior researcher Cameron Kusher.
    Sydney's Point Piper, where the city's most expensive homes are located, showed the biggest fall in listing prices, down from $12.12 million in the September quarter to $10 million in the December quarter.
    "Anyone looking to sell will have to accept they won't get the prices of 12 to 18 months ago," Mr Kusher said.
    Liam O'Hara, senior economist for researcher Australian Property Monitors, said home owners in exclusive suburbs were often selling to pay down debt.
    "These were the suburbs that people thought would be insulated, but are becoming the worst-affected areas as the finance industry jobs market drys up," hesaid.
    Sydney's northern beaches have been "belted", with values generally 20 per cent lower than they were a year ago, according to Ray White's Noel Nicholson.
    "Before the financial crisis, a lot of people in the finance sector used their cash bonuses to buy a second house up here," Mr Nicholson said.
    He said listings had doubled from this time last year, as many part-time residents sold their weekend and holiday homes.
    Cassandra Bancroft, who is selling her weekend home on Rayner Road on Sydney's Whale Beach, said: "Everyone's playing a little wait-and-see. But we're confident that the home is saleable. We think there's someone out there who'll love it as much as we do, and will pay the right price."
    The Bancrofts expect more than $6 million for the home they built three years ago. Their home is one of six properties for sale on Rayner Road in recent weeks.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    Queensland stripped of AAA rating

    Sean Parnell, Queensland political reporter | February 21, 2009

    Article from: The Australian
    VOTER confidence in Labor's ability to govern during the economic crisis will be tested for the first time in Queensland, where an early election is almost certain after the Bligh Government revealed yesterday the state budget had plunged $1.6billion into deficit.
    The collapse of fortunes forced ratings agency Standard & Poor's to lower the state's long-cherished AAA credit rating for the first time to AA.
    The lower credit rating will put further pressure on the state's finances by increasing the cost of borrowings to fund a growing budget deficit and heavy capital works program.
    Once Australia's boom state, riding a wave of property and mining investment, Queensland has an economy grinding to a halt. Treasury officials issued a dire warning yesterday for the next financial year, when they fear the budget deficit will double to $3.2billion.
    The latest forecasts, which take into account the Rudd Government's $42 billion stimulus package and recent interest rate cuts, predict a further 60,000 people will be laid off in 2009-10, when economic growth will slump to 1per cent, putting Queensland on the brink of a recession.
    With the property market stagnant and weakening global demand for coal, the $809 million surplus forecast for this financial year had become $54 million by December and was revised yesterday to a $1.573 billion deficit.
    In the past two months, Treasury officials have revised down revenue collections by $500 million in transfer duty, $427 million in royalties and $334 million in GST, and for the first time will have to top up the supposedly fully funded government superannuation scheme.
    State Treasurer Andrew Fraser said yesterday if Queensland did not fall into recession, it would certainly feel like one and he could not rule out having to increase taxes or cut services.
    But Mr Fraser said the Government remained committed to its borrow-for-building campaign, even though it would cost more to deliver, and was going into deficit to sustain economic growth as much as possible. "We've thrown everything we've got - the kitchen sink has been thrown at this," he said.
    But while Mr Fraser maintained Labor had a mandate to deliver the next budget in June, the chances of Premier Anna Bligh calling an election for March 28 are increasing.
    Legislation designed to put Opposition election promises under greater scrutiny will be fast-tracked through parliament next week, Labor is rapidly preselecting candidates in seats where MPs have recently announced their retirement, and party advertising has started seven months before an election is due.
    The biggest influence on the campaign may be the Rudd Government's latest cash payments, which will start being distributed next month and for which the Bligh Government is likely to take some credit, having campaigned heavily for the conservatives to support the second stimulus package.
    Kevin Rudd and Wayne Swan will be watching developments in their home state closely, given it will be the first election since the crisis and Queensland remains a vital electoral battleground.
    But Ms Bligh - who spent yesterday in the industrial city of Gladstone, to open new offices for oil and gas producer Santos and emphasise she was still working - again refused to comment on the prospect of an early election.
    "Clearly every government, mine included, has a responsibility to lead a path through these very turbulent circumstances," Ms Bligh said, pointing out that Santos still expected to spend $1billion on Queensland gas projects this year.
    "I am going to lead that path honestly and transparently, but with a high degree of confidence that we will come out of this stronger than before." With Opposition Leader Lawrence Springborg also out of Brisbane, working in his southern Queensland electorate, LNP Treasury spokesman Tim Nicholls took Mr Fraser to task.
    Mr Nicholls - who only months ago declared an LNP government could maintain a surplus simply through better management - said the crisis was partly of the Government's making.
    "For 10 years we have had rivers of gold flowing into this state ... and for 10 years Labor has wasted that money," Mr Nicholls said, highlighting poor management, cost blowouts on major projects, a lack of savings and a belated reliance on borrowings. But Ms Bligh said Mr Springborg and Mr Nicholls had "buried their heads in the sand", refusing to acknowledge the global financial meltdown everyone else was so concerned about.
    "People are not fools: they know there are job cuts in their community, they know that people have stopped buying property, they know that the private sector has pulled back on some building projects, and in central Queensland particularly they know that the world demand for coal is collapsing," Ms Bligh said.
    Queensland joins NSW, South Australia and Tasmania in deficit, with other states yet to provide a budget update.
    The Queensland Chamber of Commerce and Industry and the state chapter of the Australian Industry Group expressed alarm at the size of the deficit and called on the major parties to outline their economic recovery plans.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


    • #3
      As a coal exporter, Queensland is the state economy most exposed to Australia's biggest export market. Western Australia depends more on iron ore exports to China, which is still tipped to grow solidly through this year.
      Queensland's budget update suggests the Japanese contract renegotiations to apply from April could cut coking coal and thermal coal prices by 40-50per cent. Japan's recession will further cut the amount of coal it buys from Queensland.
      And that will crunch Queensland's coal royalties from $3.2 billion this year to an estimated $1.7 billion next year.
      "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


      • #4
        The interesting thing about the hedges row lot is that I bet a lot of those 20 distressed sales are from a couple of blokes I know over there who were buying up everything on Hedges for a while and when I was back a week or so ago one of them had just gone into receivership.

        My mate "kaos" will be having a field day as he is the agent who sold most of the stuff along hedges and will probably be selling it now.