Tuesday, Jun 05, 2007
Housing dream vanishing,
THE DAILY RECKONING: Housing Crisis Deepens As Australian Capital Reserve Collapses
Everything comes down to valuations and expectations,ACR slapped huge valuations on its property developments in Victoria and New South Wales.This put dollar signs in the eyes of investors who were prepared to believe that property is always a rock solid investment. When the company was cut off from financing by a stop order from the ASIC, the jig was up.And now, investors may lose everything.With global borrowing costs so low, you have to wonder why any credible firm would chose to raise capital in bits and bites from mum and dad investors.Most banks seem willing to open their chequebook to anyone with a pulse.Unless your intentions are less than honourable to begin with, why would you raise money for million dollar property developments from small investors?Hint,the answen
1 Comment
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1. Orwell said...
I dont understand how this affects UK HP's Chris over to you? Here, most new build BTL's are of small Capital Gains in the last 2 years (c. 10%?). In that case, yes there will be many of them around in less desirable areas possibly but the costs will be lower which will lever an awful amount of deflationary pressure genrally on prices - I don't understand the Aussie article?