Economy

Auction results grim, but billionaire developer Lang Walker hunting for bargains

SmartCompany /

The final big weekend of auctions across Australia may have ended with a whimper, but that hasn’t stopped billionaire property developer Lang Walker from targeting the lower end of the residential market as the area that will spark the property recovery.

The final big weekend of auctions across Australia may have ended with a whimper, but that hasn’t stopped billionaire property developer Lang Walker from targeting the lower end of the residential market as the area that will spark the property recovery.

While Walker is adamant there will be “carnage” next year as property owners who have borrowed heavily and paid inflated prices are forced to sell assets to survive.

“If it’s not distressed, it’s about to be,” Walker told The Australian.

But the veteran – who sold the bulk of his portfolio for around $1.25 billion at the top of the market in 2006 – is on the hunt for bargains and describes this as one of the “best times” for buying he has seen in 30 years.

One of his primary targets is the housing market. Walker says he is planning to develop 35,000 residential blocks of land over the next 15 years, with about 70% of these blocks at the cheaper end of the market.

“The glimmer of hope is in the lower end of the residential market, which should kick in again towards the middle of next year.”

This week’s auction clearance rates would indicate that the recovery is still some way away.

Melbourne was the busiest market, with 662 properties up for auction. The clearance rate improved from 55% to 57%, with Real Estate Institute of Victoria chief executive Enzo Raimondo describing the result as “a glimmer of hope” for the struggling market.

Results were mixed across the rest of the country.

Sydney’s clearance rate improved from 52% to 53%, with 227 properties going under the hammer. Brisbane’s rate dropped from 25% to 19%, although there were only 38 properties up for auction.

In Adelaide, the clearance rate was just 33%, compared with 53% last week, although there were just 18 properties going under the hammer.

Real estate agents and property commentators will be looking for signs of recovery early next year, particularly if the RBA cuts interest rates again as expected.

But buyers might be best to heed these comments from Lang Walker.

“Our biggest danger is not to make a decision too quickly and too early. The market could get worse by the middle of next year.

“It’s almost like walking through a minefield – it’s a smorgasbord of opportunities, but you have to be very wary where you tread.”

 

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