Shares in McGrath Limited plunged more than thirty per cent today, after the listed real estate agents were forced to disclose an “unforeseen” slowdown in residential listings.
McGrath has continued to experience an unforeseen low volume of listings and sales in the first half of April, particularly in the North and North Western suburbs of Sydney. The Company believes the fall in listings in the North and North Western suburbs of Sydney is in line with the market in those areas.
According to the trading update, there has been a 25 to 30 per cent decline in listings in the “Smollen areas” compared to the prospectus forecast released last year when the company listed. The descent emerged in the later part of March.
McGrath acquired ten franchises in Sydney’s mid to upper North Shore, North-West and Northern Beaches regions from Shane Smollen in October last year.
In addition to the decline in listings, there has been a marked reduction in Chinese buyer activity in the North Western Sydney according to the group.
The disclosure will put increased pressure on property spruikers who to date has claimed the market is still strong.
» Sydney housing market issued “sell” rating – Who crashed the economy, 21st February 2016.
Anybody with a subscription to http://www.macrobusiness.com.au would have had a front row seat with the details on how this would turn sour long before McGrath was even listed. Worth the subscription through and through. This site have saved me many times. They have been spot on the AUD and what is happening in mining too!
Can’t be bothered looking for the articles, but many commented at the time, that prior to McGrath listing, the last REA’s to list did so within months of the ASX top, prior to the GFC….. McGrath was to be viewed as the same….
Total, slimey snake. A trader mate looked over the finances of the IPO and it was a DOG of a deal. Buying a brand name pie and iced coffee was a better investment… And I’d consume that within 15 minutes……
Sad thing is, for many, after taking interest payments into account, buying a property is probably a worse deal than buying McGrath at IPO…..
I bet the NLP are racing to get the election won so MT can hand out those lovely bailout/in cheques sitting on Morrison desk…
It’s about to get exciting.
Oooo, ahh.
PS. Hey if listing’s are down, maybe they should setup shop in Whyalla, plenty of listings there!
I wonder how many people took equity out of their homes to buy this turkey? Lol.
Advance Australia Fare ! Sydney , in 1978 , you could buy a house and pay for it in 4 years from one workers full income . Nearly 40 years later , the wage is nearly the same in numbers . But a 2 bedroom apartment is nearly one million dollars . If you borrow that money it can become a two and a half million dollar debt . The average workers full income may cover it IF one works for 100 years . The youth did not deserve this . The middle fair go , that once made this country great , is extinct . Our fraudster leaders are all way to greedy . Everything is directed from above . The fish always stinks from the head !
Anyone stupid enough to buy shares in a Real Estate agency…well
Who in their right mind would buy into an IPO issued by anyone in the White Shoe Brigade. McGrath paid himself $37 million from the proceeds just prior to the market rolling over. Dick Smith, Queensland Nickel and so the list goes on. It appears that fraud is now the new business model.
It’s not just fraud in the private sector that’s destroying our society, its the government sponsored scams like privatised vocational education and Job Services Australia
The voters of Australia have been sucked in by the neo-liberal bullshit artists in the Liberal party and the Labor party. No doubt they’ll continue to vote against their own interests and for the interests of professional scammers.
And of course Australian property continues to be a target for international money laundering.
http://www.smh.com.au/business/the-neverending-money-laundering-review-20160306-gnbse0.html
None of the Canberra press gallery would have the gumption to ask pointed question about money laundering to our federal politicians. They’re too worried that they’ll lose access.
The ABC are too scared of being labelled biased and having their funding cut while the private media know which side the bread is buttered on.
In any case the half of the population that are speculating in property don’t want to know about it. If there’s a buck to be made who cares where it’s coming from. It could be coming from the Chinese triads, the Russian mafia, South American drug lords or international terrorist for all they care.
Which raises an ugly question. Are dubious people buying their way into a Australian residency? Do we really want to be attracting international criminals into our country. We’re “open for business” alright.
Sorry that vocational education article is here:
https://newmatilda.com/2015/11/26/vocational-training-rorts-show-education-and-the-free-market-make-a-bad-mix/
And the important bit is this:
.
Human services should always be not-for-profit. Profit gained from government funds earmarked for human services is just taking funds away from other needy people.
Of course if you’re politically connected that’s alright. I don’t care how good a job you do. You can do just as good a job as a public servant earning a public servant’s wage.
comment #1
3s I agree, the best thing I did was to join MacroBusiness, very complete, accurate, honest and worth every cent.
@ David
Absolutely, I used to dismiss the idea, but “capitalism for profitable sectors, socialism for the loss making”, is certainly true.
It’s crazy to think that infrastructure companies, education companies, childcare companies, job matching etc etc all make huge profits while our society falls apart as mental institutions, hospitals, social programs are all wound back.
Two speed economy? If only, we’re building a two class society. Our politicians at all levels are clearly lacking vision and initiative and are simply puppets to the 1%.
The “journalists” aren’t asking the hard questions because they too are heavily invested in property. I would say without a doubt that 99% of my work colleagues are invested in property and I’m not joking I’m talking thousands. We even have a film about a Real Estate Agent now! (http://www.theguardian.com/film/2015/oct/18/a-month-of-sundays-review-anthony-lapaglia-john-clarke-matthew-saville)
How far has our nation’s dumb obsession gone?
Our government threatens “renters” when negative gearing is mentioned and they’ve literally divided the nation into “renters and owners”. How pathetic is that? Middle class welfare, Liberals were planning to throw another $3000 baby bonus at the dimwitted public to buy votes this year, all adding up to a BS economy.
Here are a couple of quotes from “The Big Short” that seems to apply now:
“People hate to think about bad things happening so they always underestimate their likelihood.”
“Fraud has never ever worked. Eventually, things go South. When the Hell did we forget all that?”
I’m starting to think that most people know what’s going down. The young generation, our children, that are being totally shafted by the fraud order are aware of the scam of the century. They realise that, unless one is connected, there is no fair go. Next time, you’re driving in suburbia, look at who is behind the wheels of the most expensive new vehicles. They are kids still going to school. Many things rotten in OZ and if it keeps going, the way things are headed, our children will be homeless in the land their elders built. We let this happen in 30 short years. Maybe we had no choice. Why should we enjoy stolen utopia when the CCP deserve it (not). Maybe it’s our karma for what we did to the real locals of this ancient land. The european dominance here is over. Communism is the blueprint for the fraud world order. And our masters are backing the invaders. In business it’s called “changing the blood”.
estupidos,
Most of the commenters here probably have pessimistic personalities, so when big shocks come we’re well prepared. The optimists are completely oblivious, sucked in by the “fear of missing out” BS that the shysters continually spout.
While I have been predicting that the crash would occur for several years now, I have also been unaware of the extent of the shifty (if not illegal) things that politicians and the bankers have been doing to keep the bubble from bursting.
I sense that things have really turned now and there are few tricks left. Whoever wins the next election will have to loosen the spigots of government spending. No doubt they’ll direct it to those needing it the least.
One thing I’m almost certain of is that once the windfall of stamp duty has dried up because of illiquidity in the housing market, state governments will introduce broad based land taxes to fill the gap. Of course land values will be falling so it won’t produce anywhere near as much revenue as one might initially expect.
I believe the term for financial karma is a “correction”. I am bemused by this news. I do think that there was enough warning on the risks involved prior to listing of this company. Anyone choosing this company to invest in at the time was taking a gamble. In fairness it would not be a nice thing to deal with, but this is the reality of market economies. If the government takes a hands off approach, while regulators go for stability and fairness, then the market will find it’s balance. The problem is that most home owners believe that the balance is always up.
Just watched Malcolm on the ABC, Negative gearing will not be changed in the next budget, nor whilst the Liberal Party are the ruling government.. I believe housing will become the biggest agenda for the next election, but for me all is too late, keep NG and the government has less income to support and maintain public services, tax individuals more and more, keep going into greater debt and not allow new home buyers and our children to be able to afford a property OR get rid of NG and watch property prices collapse, investors go into bankruptcy, a construction industry melt down, higher unemployment and the possibility of the banks not being able to survive such a downturn. ” Dammed if you do, dammed if you don’t” What a “Cluster F&@k”..
Interesting they noted that 1/3 of people Negitive Gearing are earning less than $80,000 per year, that just shows you how brittle and out of wack this economy is, seems like only a sharp correction will be the only way out……,
David C,
Yep agree. There’s always a correction as Lara says. The believers always like to point out that predictions don’t come true because they try to force a pinpoint of a date it will happen. But they soon pull the RE Crystal Ball out when they’re arguing their point like Turnball did today with the “Mess with Negative Gearing and house prices will go down for Mum and Dad investors and rents will go up.” WTF was that? That was the most blatant RE spruiking and fear-mongering I have ever seen. The Liberal Party of Australia should rebadge themselves The Real Estate Party of Australia.
I know a few idiots who will vote Liberal on that fear alone because of either greed or they’ve leveraged up to the eyeballs with multiple investment properties. But I don’t think that will save the Liberals this time. Roll on July.
In Australia, the asset of choice is, of course, the property!
But what’s this? Could the sector, which now competes with Christianity as Australia’s most important belief system (in property we trust) be faltering?
When you see one of the nation’s largest rent seekers (Harry Triguboff) complaining to the media about the state of the market, you know there’s something going on.
It follows the negative gearing debate from a few months back which saw more foaming at the mouth from the property lobby than a pack of dogs with rabies.
Just to be clear neither do I sympathise nor affiliate myself with either of the major parties here (no matter which way you go in the end it’s a choice between dumb and dumber). However, from bystander point of view Liberals are happy keep pretending all is OK kicking the can further down the road (I haven’t heard any sound policy from them yet). Labour at least got the balls to face the issue everyone is taking about lately – you can’t avoid the white elephant in the room any more.
Just to clarify, the 80 000 that negative gearer’s earn is calculated due to loss making. Negative gearing can only be claimed by a loss making land lord. It can not be claimed by a vacant possession. The very act of negative gearing misrepresents earnings. Negative gearing is a failure of a strategy if people lose their jobs
Yep game over. The Liberals just won the election.
Malcolm will be pumping the sheeple full of fear from here on out.
Even if joe average knows deep in his heart that Negative Gearing is a rort, when it comes down to the value of his own home or his Investment Properties he will side with the Libs.
There is no way Labor can compete by telling the truth.