sell off, page-6

norbita, I too agree there's a whopper of a rat fall coming for housing. By may-june the redundancy payouts for the 50-60,000 jobs trimmed in the september-december quarter will run out (even though interest rates are down) and people will begin defaulting en masse. Especially the young guns who've got 2 or 3 properties on tick, all that has to happen is one of the houses fails and its like dominoes.

I think that the new home buyers can sense this - the uptake of FHOG has been paltry. Why buy now when prices keep falling?

Sure rents keep going up, but thats a concoction by the real estate boffins who collectively have a heap of negatively geared properties. The rents are up because they needed to go up to cover the spiralling debts - but as soon as its cheaper for young couples to buy vs rent, the market will evaporate and once the demand is gone, rental yields will collapse, and the dominoes will start falling.

Retail and office rents will come down. They have to - there's a massive glut. In Perth there's 4 major retail/office buildings in the city centre coming on stream this year and 3 have just been completed. No one's got the money to cover them. It'll be interesting to see, but I reckon rents will dive 20-30%, putting pressure on MOF's income, etc.

However...with a fairly reasonable balance sheet, bankruptcy isn't yet on the cards for MOF and a few others. But we'll see more asset sales at 15% below last year's book values, and likely more cheap equity and diminishing or stopped divvies. I'm not expecting to get this next divvie from MOF, actually. They don't hold their hand out for cash if they're going to have to hand some of it back to you.