Australia Roundup: Oceanfront Homes for 65% Off; Chain Sales and Contingent Offers; Retailers Brace for More Job Cuts; Cusp of a White-Collar Recession
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Reader "Brisbane Bear" from down under sent potpourri of links on the dwindling prospects for the Australian economy.
Oceanfront Homes for 65% Off
In apples, rot starts at the periphery and spreads to the core. In real estate, rot starts in condos and vacation homes, then slowly encompasses city after city.
Please consider Investors snap up coastal property bargains in Queensland.
While prices soar in some coastal towns close to mining centres, astute buyers are managing to secure ocean- front homes in traditional tourist locations for $500,000 or more off peak prices as vendors cave after years of trying to sell.Chain Sales and Contingent Offers
One buyer scored an oceanfront unit in a marina development at Cardwell, halfway between Cairns and Townsville, for $157,000 - almost $300,000 less than it sold for in 2006. The unit had been on the market for three years.
A penthouse with ocean views in the same development sold for $570,000 less than its 2007 sales price.
RP Data senior analyst Cameron Kusher said buyers of the most affordable seaside holiday homes needed to be prepared for a long commute. But he said coastal market values had fallen across Queensland, meaning bargains could even be found in popular locations.
When all else fails, buyers accept any offer they can get including contingent sales as noted by The Age in Risky ride on the vendor-go-round.
SELLING a home is stressful at the best of times. Failing to sell at auction in the midst of a property downturn can be its own kind of nightmare.Retailers Brace for More Job Cuts
But imagine if it turned out that the only way to sell your home depended on the buyer having to sell theirs first.
It is a scenario Gavin and Verity Carson never considered when their Abbotsford terrace house went to auction and was passed in.
After later negotiations with a bidder broke down, they were left at a loss about what to do next. Looming was the threat of a lengthy wait in the private sale market, already flooded with thousands of unsold homes.
"All the people that had been interested were no longer interested - we had to really start the campaign from scratch," Mr Carson said, adding that they already faced a $10,000 advertising bill for the auction.
"Ideally, we would have sold at auction," Mr Carson said. "We did end up taking a lower value than we were expecting but that's really just indicative of the market at the moment. We're glad that it's over - put it that way."
In Britain, subject-to-sale transactions can often evolve into "chain" sales involving multiple properties that must all settle on the same day.
Following a dismal Christmas selling season, Retailers brace for job cuts
THE battered retail industry is bracing for a fresh wave of job cuts, with the crucial Christmas shopping season failing to deliver a much-needed surge in sales.Cusp of a White-Collar Recession
Analysts predict a clutch of struggling retailers will fall into administration in March, joining a list of failures over the past year that includes the booksellers Borders and Angus and Robertson, and the clothing retailers Colorado and Fletcher Jones.
At the same time as they slash costs in their stores, retailers are pouring resources into information technology - pinning hopes of a return to growth on tightening the link between physical and online shopping.
In November, a month when typically volumes rise in the run-up to Christmas, retail sales fell from a 0.2 per cent growth in October to no growth in November, while department store sales in trend terms fell 0.2 per cent.
"You've seen the Bureau of Statistics retail sales for November, and it's pretty dismal," said a David Jones spokeswoman, Helen Karlis.
"There's no sugar coating, it's just what's happening. Flat growth is probably a good thing in this environment."
The Australian National Retailers Association's chief executive, Margy Osmond, said retailers looked at the flat November retail sales with disappointment ''and concern''.
"At this stage, many retailers have chosen to reduce staff hours rather than lose valuable people, but there is a real concern in the sector about keeping jobs," she said.
Cost cutting would continue in the retail area, said the Commonwealth Bank's retail analyst, Andrew McClennan.
"But also there is no doubt there are going to be significant layoffs through further business failures," he said.
Please consider Bank on white-collar crisis
AUSTRALIA is on the cusp of a white-collar recession with insiders warning that thousands of jobs are at risk in the finance sector, after it emerged yesterday that ANZ planned to cut 700 jobs.Australia is not on the "Cusp of a White-Collar Recession", Australia is smack in the midst of a general recession affecting nearly all aspects of the economy but mining. As China slows, mining will slow as well.
But The Saturday Age has established the job cuts will total as many as 1000 by the end of this year, which will be more than the bank shed at the height of the global financial crisis.
They come a day after the Royal Bank of Scotland announced plans to close its investment banking business, leading to the loss of more than 200 jobs in Australia.
Economists have warned Australia is vulnerable to a recession this year with a wholesale funding squeeze in Europe raising debt costs for banks such as ANZ.
Experts say thousands of jobs will be lost from the industry this year as banks scramble to adjust to an era of low credit growth and higher funding costs.
This comes on top of cuts of 2150 jobs between March 2009 and last September in ANZ's Australian division. "We have run a policy of shedding jobs through attrition since October last year," an executive said.
"Temps have not been rehired once their contract has expired. Secondments have been stopped. We have outsourced two whole floors of operations staff from a [Melbourne] office to Manila [in the Philippines]. If you count all those jobs since October, along with what will be announced in the next week … we will lose more staff than we did as a result of the GFC."
Expect the real estate rot to spread to the core, sooner rather than later. The collapse in commercial real estate values, condos, and homes will be stunning.
Mike "Mish" Shedlock
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