"Developers dropping Fat New Houses Squash Property Market"

[Heg]

Excellent! Thanks for posting that Sara.

[jporteous]

The Next Slum

It seems to be happing overnight in the US.
http://www.theatlantic.com/doc/200803/subprime

From the above article

Arthur C. Nelson, director of the Metropolitan Institute at Virginia Tech, has looked carefully at trends in American demographics, construction, house prices, and consumer preferences. In 2006, using recent consumer research, housing supply data, and population growth rates, he modeled future demand for various types of housing. The results were bracing: Nelson forecasts a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025—that’s roughly 40 percent of the large-lot homes in existence today.

Suggest reading the above link. Really interesting!!!

[mortgage broker]

Yeah Jurgs, banks were doing that kind of lending right up untill a few months ago. No proof of income loans still happen with around 20% - 25% deposit. I don't know many developers who are still in the game in a big way. Many of the developers I know wound down last year.

[tpr2]

And why not. HD living is perfect for modern societies. The problem I've seen in NZ is that many of the developments are poorly designed and constructed. For it to work, you need to create spaces conducive to harmony, not Stalinesque hutches of depression.

Im with you tanmedia.
2 of my three PPR's (yes i have 3 PPR's) are apartments.
They are not your usual apartments though with one being a 308m2 penthouse in Auckland and the other being a 125m2 2 beddy on the waterfront on the Gold Coast.

And if the only options were Stalinesque hutches of depression then I too would be seeking an abode with more space to create harmony.

Terry

[tpr2]

In fact - the banks should look at a product where they take an equity position, to avoid bing swamped by losses. I don't think people realised to what level 'sub prime lending' occurred here - we just haven't seen the fallout.

MacQuarie in Oz actually introduced that as a product about 2 years ago jurg however they have now decided to exit the lending market altogether.

I think it is a great idea however banks are banks...and to take an equity position is absolutely foreign to them.

cheers

Terry

[Jurgs]

Hamish - I know, I am in the same profession as you, and am seeing plenty of Lo-doc applications every week. Having said that - none are as easy as last year - Lenders that still have the product are generally looking for some correlation between stated income and deposits on bank statements. It's nowhere near the free for all it was for the last few years.

I also had quite a few developers wind down last yar, but still know plenty that are still going. Specifically, i'm seeing a few developers who took projects off distressed developers, thinking they were more cashed up and could finish the project and take the margin, now finding they can't. I stand by my earlier commeent that there's plenty more to come. Both from developers and residential sub prime.

Terry - did MacQuarie's product work? I can imagine here that if done properly it could settle the market somewhat, and provide releif for both borrowers and lenders.

[tpr2]

Hi Jurgs
I don't have the inside running anymore, we used to be MacQuaries biggest referrer in Australia however they no longer do lending and are focusing on their FUM business in Oz.

I doubt that it worked that well for them because while the markets were booming nobody wanted to share in the upside with them. I bet there are people now who wish they had taken the product when it was available.

cheers
Terry

[Badger]

Thanks for the Jim Kunstler link Badger, http://www.kunstler.com he writes an interesting, hard hitting AND amusing commentary. Here's an example:
July 14, 2008 Event Horizon


There's a particular moment known to all Baby Boomers when Wile E. Coyote, in a rapture of over-reaching, has run past the edge of the mesa and, still licking his chops and rubbing his front paws in anticipation of fricasseed roadrunner, discovers that he is suspended in thin air by nothing more than momentum. Grin becomes chagrin. He turns a nauseating shade of green, and drops, whistling, back to earth thousands of feet below, with a distant, dismal, barely audible thud at the end of his journey. We are Wile E. Coyote Nation.

Yea Jim Kunstler has a interesting perception thats for sure well worth checking his site out now and then...glad you liked it!

[Austrokiwi]

And why not. HD living is perfect for modern societies. The problem I've seen in NZ is that many of the developments are poorly designed and constructed. For it to work, you need to create spaces conducive to harmony, not Stalinesque hutches of depression.

{tongue in cheek} So you support "battery farm" living.

[Bluekiwi]

There just seems to be more coming to the market right now, well in Albany anyway.