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120 Aussie suburbs could be set for a price plunge

Samantha Menzies
120 Aussie suburbs could be set for a price plunge
120 Aussie suburbs could be set for a price plunge

Concerns of oversupply and a slowing property market have led one of the country’s leading banks to list 120 suburbs across Australia that will be subject to special lending conditions.

Despite a weakening in demand, more than 210,000 units are expected to be built within the next two years in Melbourne and Sydney alone, according to CoreLogic RP Data figures.

Also read: Unveiled: Australia's cheapest suburbs

While developers continue to argue that the property boom for newly built apartments will not cause a substantial oversupply, Macquarie bank disagrees, drawing up a list of risky locations for apartment gluts.

In a confidential memo sent to brokers last week Macquarie Bank said it would demand a 30 per cent deposit on units in these high-risk areas from May 23, the Australian Financial Review reported.

The list includes 20 Sydney postcodes, 15 in Victoria and more than 40 locations in Queensland.

High density postcode listing across Australia's three major cities

POSTCODE 

SUBURB

STATE

 

 

 

2000

Barangaroo, Dawes Point, Haymarket, Millers Point, Parliament House, Sydney, Sydney South, The Rocks

NSW

2001

Sydney

NSW

2002

World Square

NSW

2003

 -

NSW

2004

Alexandria, Eastern Suburbs MC

NSW

2006

University of Sydney

NSW

2007

Ultimo

NSW

2017

Waterloo, Zetland

NSW

2138

Concord West, Liberty Grove, Rhodes

NSW

3000

Melbourne

VIC

3001

Melbourne

VIC

3004

St Kilda Road Central

VIC

3005

World Trade Centre

VIC

3006

South Wharf, Southbank

VIC

3007

 -

VIC

3008

Docklands

VIC

3009

 -

VIC

3141

Chapel Street North, Domain Road Po, South Yarra

VIC

3205

South Melbourne, South Melbourne DC

VIC

4000

Brisbane, Brisbane Adelaide Street, Brisbane GPO, Spring Hill

QLD

4001

Brisbane, Central Plaza, Riverside Centre, Waterfront Place

QLD

4002

City East, Wintergarden

QLD

4003

George Street

QLD

4004

Spring Hill

QLD

4215

Australia Fair, Chirn Park, Labrador, Southport, Southport BC, Southport Park

QLD

4217

Benowa, Bundall, Bundall BC, Bundall DC, Chevron Island, Gold Coast MC, Isle of Capro. Main Beach, Surfers Paradise,

QLD

4218

Broadbeach, Broadbeach Waters, Mermaid Beach, Mermaid Waters, Nobby Beach, Pacific Fair, Q Supercentre

QLD

4870

Aeroglen, Barron Gorge, Brinsmead, Bungalow, Cairns, Cairns Central, Cairns City, Cairns DC, Cairns MC, Cairns North, Cairns Orchid Plaza, Earlsville, Earlsville BC, Edge Hill, Freshwater

QLD

In Melbourne, the areas listed by the bank as high density include Southbank, Docklands, South Yarra and the World Trade Centre district.

In Sydney, the CBA and surrounds, Ultimo, Barangaroo, Haymarket, Dawes Point, Millers Point and The Rocks are all classified as 'risky', as are Rhodes and Parramatta over in the west.

Meanwhile, Surfers Paradise, Cairns Central and Brisbane are all listed as high-risk areas in Queensland.

Also read: The car-free suburb of the future

“There is the concern that there is a little too much development going on there and people should be wary,” Corelogic RP Data analyst Cameron Kusher said.

Kusher also said that the bank is trying to get ahead of the game by curbing the risk of devaluation as a result of oversupply.

“Macquarie is trying to be in front of the risk, a lot of (the new stock) is being bought by investors and as banks change policies about lending to investors, some will have trouble settling,” he said, according to the Australian.

Also read: The top 10 luxury real estate markets in the world

“With so much stock coming onto the market, the properties won't increase in value between being bought and being completed, so the person who settles on it is underwater from the start.”

But Domain Group’s senior economist Andrew Wilson argued that by raising the percentage of deposit buyers need upfront Macquarie may only exacerbate risk in those suburbs by denying them finance.

While one lender has taken the cautious approach, another major bank has taken advantage of this surge in apartments and has opened the door to investors.

Also read: The new Sydney suburb that could change everything

Westpac Bank has announced it will reduce deposits required for investor loans to 10% from 20%.

The Reserve Bank also plays down talk of a glut.

“If supply and demand are equilibrating without massive changes in prices, that sounds like a market working,” RBA governor Glenn Stevens said.