Message to self: when a real estate agent with insider knowledge is trying to sell his stake in the market, DO NOT BUY.
ABC’s The Business ran a great little segment last night on the McGrath Limited’s turkey float, whose share price has fallen by around one-third since listing at $2.10 some three months ago:
Roger Montgomery, who was interviewed in the segment, values McGrath Limited at around $1, roughly half the float price:
Michael Janda [ABC]: “A looming apartment glut, combined with a 50% price surge in McGrath’s key Sydney market makes for a volatile mix”…
Roger Montgomery: “Wherever there has been an oversupply, prices have subsequently fallen. And agents are in the firing line when property prices go down. And we think we are in line for a correction in property prices”.
A Western Sydney real agent, Edwin Almeida, also notes that a property correction is already happening around Parramatta:
Michael Janda [ABC]: “Out in the burbs. Edwin Almeida says forecasts of a property bust are already becoming a reality in his patch around Parramatta in Western Sydney”.
Edwin Almeida: “We’ve identified some areas where properties have actually already gone backwards by anywhere between 8% and 15%. Asking prices have been dramatically pulled-back in some parts of Sydney by up to 20%”…
