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Apartment meltdown looming as Chinese think of walking away

Property Observer
Apartment meltdown looming as Chinese think of walking away

Australia faces the potential of Chinese walking away from apartment settlements at the rate of between $1 billion and $1.5 billion a month for a year or two, according to The Australian columnist Robert Gottliebsen.

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"In the worst case scenario a large number of apartment developers go to the wall taking with them many unsecured suppliers," he wrote.

He advised that Sydney’s Harry Triguboff went into the crisis without debt and can cushion the impact on the city.

"Melbourne and to a lesser extent the already depressed Brisbane will feel the full force of any disaster," the veteran columnist advised.

He added that much was being done to reduce or avoid the above scenario taking place.

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He said that the Australian apartment developments are in three baskets:

First, those being developed by large well-capitalised enterprises like Meriton or the listed apartment developer.

Second, those being developed by developers with big Chinese backing and funded by Chinese banks. They are highly leveraged;

Third, developers funded by Australian banks.