Much of the property bubble has been driven by an underpinning to it of Chinese "Hot Money". Agents, lawyers and accountants have all played a key role in assisting Chinese investors skirt the FIRB and buy properties selling to each other in what is fundamentally a Ponzi scheme of sorts.
In Melbourne for instance a developer has "pre sold" over 600 of an approved 1,100 blocks to purchasers (mostly locals who are nominees of Chinese and south east Asian buyers). They place a deposit on each of these blocks and then on sell them to others to whom they are marketed for a higher price. It is a form of money laundering. Money is paid in Kuala Lumpur on behalf of many of these "purchasers", banked via a correspondent bank in Singapore and held for cosmetic purposes to obtain the necessary building and development approvals.
The same Melbourne developer is now caught in a bind with the "Agent" who arranged the 600 sales putting the squeeze on them. The Agent wants more money than is possible to on sell or is threatening to let many of these contracts crash.
The same pattern is applied all over Australia in the property development sector. Highly geared, highly hyped and highly over priced. And our politicians and local authorities have all known it for a very long time. In fact the modus operandi of these groups was known as far back as Howard's time in government. But then the price of iron ore and coal were so high Peter Costello believed he had a magic wand and it would not end.
The RBA is about as useful as the proverbials on a bull.
- Forums
- Property
- Dark days for Western Australian property market
Dark days for Western Australian property market, page-39
-
- There are more pages in this discussion • 266 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Featured News
The Watchlist
1CG
ONE CLICK GROUP LIMITED
Mark Waller, MD
Mark Waller
MD
Previous Video
Next Video
SPONSORED BY The Market Online