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It’s Lost, It’s Gone, It’s Evaporated, We’re Up Sh*t Creek

A report from News.com.au on Australia. “When Andy Neverly put his life savings into unit 2208 in Sydney’s Opal Tower, he thought he’d snapped up a ‘dream home.’ But that dream turned into a nightmare on Christmas Eve when residents of the newly-built, 36-storey building were forced to evacuate due to safety fears following significant cracking. Many residents are still so worried they have refused to return — including Mr Neverly’s own tenants.”

“In an explosive interview with 60 Minutes which aired tonight, the Sydney man said he was facing financial ruin after forking out $840,000 for the doomed flat. When asked what the situation meant for Mr Neverly’s life savings, his reply was blunt. ‘I don’t think it’s worth anything … it’s lost. It’s gone. It’s evaporated. We’re up sh*t creek,’ he said.”

“Mr Neverly said each owner of Opal’s 392 apartments had their own ‘heartbreaking’ story, with hundreds of thousands of dollars wiped off the values of their homes. Fellow Opal Tower owner Shady Eskander said he knew of one resident selling their apartment for around $800,000 just before the crisis occurred — only to receive a paltry offer of just $400,000 days later.”

“‘The same person then said, ‘You know what?’ as the story continued to unfold, ‘Mate, I’m not even going to offer you a dollar,’ Mr Eskander said.”

“Former NSW treasury secretary Michael Lambert told Mr Greenwood ‘thousands’ of buildings across the state could be hiding serious defects like the Opal Tower. He said he was concerned Australia’s ‘construction boom’ had caused people to try and get buildings on the market as quickly as possible — and that there was a ‘high risk’ many had been ‘cutting corners’ as a result.”

From Domain News. “This Chinese New Year is expected to pass with a fizz rather than a bang for Australian property, with experts warning that ‘rivers of gold’ have all but dried up.”

“‘The trend we’ve noticed is there are no longer speculative Chinese buyers coming in, said investment portal Investorist founder Jon Ellis. ‘There are still Chinese people buying property if they have migration plans, if they have education plans. The straight investor is gone.'”

The Sydney Morning Herald. “Scott Morrison and Josh Frydenberg are poised to accept almost all the recommendations of the Hayne royal commission that is set to demand an overhaul of the nation’s banking, superannuation and financial advice industries.”

“In what is expected to the biggest shake-up to the finance sector and its regulation since the HIH royal commission, Commissioner Hayne’s year-long report will be released on Monday afternoon with the government to immediately deliver an interim response.”

“Mr Morrison, who as treasurer was critical of a royal commission into the banking sector, has signalled the government will focus on restoring community trust in the sector with its response. He has also warned of the dangers of a credit crunch if the commission’s findings go too far.”

“Labor leader Bill Shorten said it appeared the government was already ‘back pedalling’ on holding the banking sector accountable. ‘The reality is this is a government that can always find an excuse not to do something to bring the banks in to heel,’ he told ABC TV on Sunday. ‘I mean is really what Mr Morrison saying is that the only way that we can have a solid banking sector is an unethical banking sector?'”

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This Post Has 43 Comments

  1. From the last link:

    ‘Labor has also made moves to pre-empt the commission, announcing on Sunday plans to replicate a system from the United States whereby whistleblowers receive a percentage of the penalties imposed on white collar criminals.’

    ‘The payout to whistleblowers would come from the fines imposed on the criminal firms or individuals.’

    It’s interesting because they had their loan scandal prior to their shacks crashing. So how do you make lending easier in this environment?

    BTW, I know I’ve been posting a lot of Australia stuff lately, but a lot is happening there and I go where the action is!

  3. ‘Fellow Opal Tower owner Shady Eskander said he knew of one resident selling their apartment for around $800,000 just before the crisis occurred — only to receive a paltry offer of just $400,000 days later.’

    ‘The same person then said, ‘You know what?’ as the story continued to unfold, ‘Mate, I’m not even going to offer you a dollar’

    This kind of thing must really bug Australians cuz I’ve seen this $1deal multiple times. Jeebus Andy will take $400,000 – he’s up sh$t creek without a paddle!

  6. Those events might have contributed to the decline in building standards, but some observers claim that the biggest single reason has been the growing incapacity of public authorities to act as a proper watchdog.

    Graham Jahn, the president of the Royal Australian Institute of Architects, said the shift began as early as 1993 when tradespeople began to certify their own work and these certificates began to be relied upon.

    “There has been a general drift away by councils and other bodies from getting involved in the private building area,” he said.

    “That general drift away has created a climate … where there is not much of a culture of having your work inspected pretty much by anybody, including architects or arms-length contractors or by local councils.”

    “In today’s NSW, the person who installs your fire door is the person who issues the certificate to say that it has been installed correctly.

    “The person who says that your new building complies with the national building code can be a private contractor who is being paid by the developer. And this can be the same person who certifies that the building has been built correctly.”

    https://www.smh.com.au/national/nsw/towers-of-trouble-20181228-p50ol6.html

    People have been paying an awful lot for absolute crap for quite a long time all over the world.

    1. “People have been paying an awful lot for absolute crap for quite a long time all over the world.”

      It appears that the entire planet is populated by vast hoardes of totally dumbed down ignorant pukes. Seriously.

  7. “A recourse loan is a type of loan that allows a lender to seek financial damages if the borrower fails to pay the liability and if the value of the underlying asset is not enough to cover it.”

    Think debt slavery. 😁

    “A recourse loan lets the lender go after the debtor’s assets that were not used as loan collateral in case of default.”

    Think debt slavery that endures and endures and endures.

    Think nirvana.

    😁

    1. Sounds comparably onerous to U.S. student loan debt. Does it get discharged if the borrower dies?

    2. “Former NSW treasury secretary Michael Lambert told Mr Greenwood ‘thousands’ of buildings across the state could be hiding serious defects like the Opal Tower. He said he was concerned Australia’s ‘construction boom’ had caused people to try and get buildings on the market as quickly as possible — and that there was a ‘high risk’ many had been ‘cutting corners’ as a result.”

      Stupid is as stupid borrows and buys.

        1. Given the untold numbers of shoddily constructed high rise buildings that were built over the course of the real estate mania, it should be interesting to see how many of these survive the next couple of decades without collapsing.

    1. in 12 months time.

      Everything will be fine and the market will be going back up, right!

      “China has realized their debt limit” (or something like that).

      These people should be pissing themselves.

    2. China Real Time Report
      Shanghai Building Collapses, Nearly Intact
      Jun 29, 2009 4:03 am HKT

      In the weekend’s bizarrest news, a nearly finished, newly constructed building in Shanghai toppled over, killing one worker. As can be seen in the photo below, the 13-story apartment building collapsed with just enough room to escape what would have been a far more destructive domino effect involving other structures in the 11-building complex.
      …

      1. Jun 29, 2009 4:03 am HKT

        Kind of interesting to see a 10 year old story like that. That’s right by my wife’s main coffee shop.

    3. Building Collapse in Chinese City of Wenzhou Kills at Least 22
      Building Collapses in Eastern China
      Rescue workers sifted through the rubble after four residential buildings collapsed early Monday morning in Wenzhou, China, killing at least 22 people.
      Credit Chinatopix, via Associated Press
      By Michael Forsythe
      Oct. 11, 2016

      HONG KONG — The Chinese state news media reported Tuesday that at least 22 people had died in the collapse of four residential buildings in an eastern city the day before, a toll that would make it one of the deadliest cases of its kind in recent years.
      …

      1. (snip)

        “Building collapses are not unusual in China, whose cities have mushroomed in the past several decades as hundreds of millions of rural residents flocked to them in search of work. Shoddy construction is rampant. Poorly built structures, or ‘tofu buildings
        were blamed for exacerbating the death toll during the 2008 earthquake that killed more than 69,000 people in Sichuan Province, in southwestern China.

        “In the district of Wenzhou where the collapse occurred, more than 1,400 buildings were deemed unsafe and in need of reinforcement or demolition in 2014, Wenzhou Daily reported at the time.”

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        1. “tofu buildings”

          Wikipedia …

          “Tofu, also known as bean curd, is a food prepared by coagulating soy milk and then pressing the resulting curds into solid white blocks of varying softness. It is a traditional component of East Asian and Southeast Asian cuisines; it has been consumed in China for over 2,000 years.”

          And apparantly used as building materials in recent years.

    1. Beginning? These timelines are so absurd. What about the commodity crash that popped bubbles in Alberta, Nigeria, Dubai, Australia, Brazil, etc? London luxury peaked in 2014. Miami Beach in 2015. Manhattan in 2016, same as Vancouver. I could go on.

      January 16, 2018

      A report from Dow Jones Newswire on China. “China’s housing market has defied gravity and government restraints for two years, floating on a tide of bank loans and speculation. Until now. In Beijing and Shanghai — two of the country’s largest markets — and other megacities, sales have stalled and prices have dropped, falling slightly in some pockets and dramatically in others. Luo Chuanyun, a 29-year-old liquor distributor, bought his first apartment on Beijing’s northern edge for $150,000 in late 2016, when prices were climbing by more than 20% a year.”

      “The purchase put Mr. Luo up to his neck in debt, with mortgage payments of about $15,000 a year on an annual income of a little over $18,000. Mr. Luo said his real-estate agent told him that to find a buyer for his apartment now he would need to sell for half of what he paid. ‘I’d be short too much money,’ Mr. Luo said.”

      “Some developers that a year ago put up special crowd barriers when apartments went on sale are now biding their time. In early December, a group of homeowners stormed the sales office of their Shanghai complex, Central Washington, whose developer, Shanghai Zhaoping Real Estate Development Co., was advertising new apartments at prices about 7% less than ones sold earlier in the year. One apartment owner said the new prices suggested the value of the apartment she bought from the developer in March had dropped by about 17.5%.”

      “The developer couldn’t be reached to comment. It said on the project’s social-media account that price fluctuations are normal and that talk of substantial price cuts was ‘purely a misunderstanding.’”

      “In some neighborhoods on Beijing’s outskirts, prices have fallen by double-digit percentages. In March, main street in the town of Yanjiao was lined with busy property agencies. Buyers who couldn’t pass Beijing residence requirements or afford its prices flocked there, pushing up prices in a sleepy exurb without much of its own economy. Since then, homebuying limits helped push prices down more than 30%. ‘For Rent’ signs now adorn the windows of abandoned brokerages.”

      “‘There are people who bought multiple homes who are now trying to sell one to pay off the mortgage on another,’ said Ran Yunjie, a property agent. One of his clients bought an apartment last year for about $230,000. To find a buyer now, the client would have to drop the price by 60%, according to Mr. Ran.”

      http://thehousingbubbleblog.com/?p=10315

  12. “It’s gone. It’s evaporated. We’re up sh*t creek,” he said.

    I don’t believe schitt creek is a water resource. 🙂

  14. We interrupt this program to bring you these latest shocking developments: “Thirty years ago Senate Majority Leader Mitch McConnell (R-KY) posed in front of a Confederate flag.” We now return you to your regular programming.

      1. AOC Tweeted that she was deeply moved on Christmas morning by the generosity of a man she saw on the street giving his wallet, cellphone, and car keys to another man who only had a knife.

        1. But, but . . . the emoluments!

          A clause that wasn’t mentioned once during three years of law school.

      3. Money is a social construct and economics should be understood as a tool of society, nothing more. As such, both are inherently political and there is no such thing as a free market.

        The beneficiaries of redistribution tend to think of gains as ‘theirs’ and the victims call losses ‘theft’. A better question is what best serves the collective?

        1. A better question is what best serves the collective?

          The collective matters. But rule of law matters more. Without it the collective will destroy itself.

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