The slowdown shows that apartment prices in Sydney fell by 7% and in Melbourne by 2%.
It has also led to a gloomy forecast from analysts that the country's largest real estate developers – Mirvac, Lendlease and Stockland – are at higher risk of being billed and will result in their profits because they face projects that are being sold to buyers. The maximum of the 2017 property cycle.
A developer behind the 130 unit project in Epping has a little-known outfit called Gondon with links to a Chinese developer.
Gondon sold 69 apartments in the project that were sold as a "new standard in modern life" before receiving Newpoint receivers. It is understood that they are appointed by a foreign bank based in China.
The Happy Epping Home Owners Group earned over $ 26 million in the 2016 bubbling real estate market when Gondon built several suburban homes in Carlingford and Cliff Roads to create a super-lot development site.
The group's only previous project in Australia was the apartment house called Macquarie North Ryde.
Colliers International and Newpoint refused to comment.
CoreLogic points out that average unit prices in Epping have fallen by 2.26 percent over the year, to $ 820,000 on average.
One bedroom apartment Elysee sold up to $ 788,000 and two bedroom units were $ 1.08 million before the end of the project.
Australian bank lending has fallen by 22 percent compared to the highest level, as the big four reinforce investor screws, raising standard variable interest rates and increasing borrower application checking.
The country's biggest real estate players are facing an increasing risk that buyers will not be able to pay during the settlement due to falling housing and land prices, analysts say.
"We see Mirvac as the greatest risk followed by Lendlease and Stockland," said UBS analysts Grant McCasker and James Dut.
Apartment sales represent a significant part of Mirvac's profits, especially over the next three financial years. In 2020, almost one third of the group's income comes from settlements in Sydney and Melbourne.
The most dangerous projects are in Sydney Marrickville and the Olympic Park, which "appears already from the money" because the Sydney apartment price index has fallen by 5 percent since launch, analysts said.
St. Leonards could also become an issue if prices fell by another 5 to 10 percent.
“We are less concerned about Lendlease billing risk due to price increases since 2015-16. Starting dates for the year, ”said McCasker and Druce.
Another significant developer, Stockland, is minimally exposed to the housing market, but there are bank revenues from a significant sale of land to new homes.
The number of consumers canceling land purchase contracts is currently low, but UBS warns that tighter loans, price drops, incentives and lower deposits will increase the number of distressed buyers.
The number of speculative land buyers has been documented by trying to send their purchase contracts to Gumtree and other places that increase risks.
"We hope that Stockland's second half will settle for disappointment, as cancellation rates are increasing and billing times are lengthening," UBS said.
Property experts believe that the industry has more pain.
SQM Research real estate analyst Louis Christopher said, despite the recent fall, Sydney and Melbourne's real estate market is still overrated.
"This downturn is still on foot to run," he said on Tuesday.
"Sydney and Melbourne, despite the fall in prices, are still overestimated, have only a few months of negative gearing, and banks are still very dramatic in lending to the market."
"We think there will be more price cuts," he said.
Real Estate Editor The Age and BusinessDay for Fairfax's theage.com.au, smh.com.au, watoday.com.au and brisbanetimes.com.au.
Carolyn Cummins is a commercial property editor for the Sydney Herald.