Tightening of lending standards by Australian banks is likely to cause a "correction" and "crisis" in lower-priced apartments that will spread, resulting in smaller developer defaults, a sharp contraction in construction, with a "worst case" scenario of significant falls in home prices and a nationwide recession, according to a new report by analysts CLSA. The authors recommend a "sell" on stocks of companies most likely to be affected, including CBA, listed property giant UBS and Mirvac. Meanwhile, Lendlease warns in a new report that the rapid increase in housing supply is a significant risk for offshore banks which are funding the record number of new developments.
Tightening of lending standards by Australian banks is likely to cause a "correction" and "crisis" in lower-priced apartments that will spread, resulting in smaller developer defaults, a sharp contraction in construction, with a "worst case" scenario of significant falls in home prices and a nationwide recession, according to a new report by analysts CLSA. The authors recommend a "sell" on stocks of companies most likely to be affected, including CBA, listed property giant Lendlease and Mirvac. Meanwhile, UBS warns in a new report that the rapid increase in housing supply is a significant risk for offshore banks which are funding the record number of new developments.