Adelaide Bank Treasurer Warns of Tough Times Ahead

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Speaking at an invitation-only event for village and care operators at Colliers HQ this week, Adelaide Bank’s Treasurer and Head of Liquidity Peter Ormandy revealed: “we are in for a long period of distress.” He added that “property prices in Australia will fall by 10 percent” and we would have to get used to “a period of much lower prices.”

This will obviously have major implications for village sales – will residents hold off selling their homes in a down market? Will operators also drop prices by 10 percent to match the market?

Ormandy went on to say that while Australia is in a better place than many countries, it will take 12 to 18 months to “untie the past 10 years of [overheated]activity.” Internationally, he blamed poor accounting standards for the US crisis, stating that “if the [Government-backed] Fanny Mae and Freddie Macs go down, God help the world for a long time to come.”

Balancing his comments was Richard Wallace, Managing Director of Wallace Funds Management, who was quoted in the Sydney Morning Herald as saying the US Crisis was unlikely to slow China’s growth, which would cushion Australia. “We are not going to be as catastrophic as the US,” he furthered. A side benefit in his opinion was that Perth and the coal towns of Queensland may not suffer the 10 percent housing drop.

Logic dictates now would be the time to market aggressively to attract new residents so that they can sell their homes before the residential market slides. See next story.

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