Remember Banksia, the bank that wasn’t (despite its name)? Remember also my suspicions that it was a Ponzi scheme?
Well here’s Gippsland Secured Investments. What is it with these companies and misleading names? “Secured investments” being the last thing any money in that company turned out to be (h/t Macrobusiness)
The lending book isn’t that large comparatively ($150m) but it’s interesting that the problem is similarly an un-forecast number of “soured” loans. Is this a canary for the Victorian property market?
My personal indicator of the Australian property market (and yes, I know there are multiple markets based on state and rural/urban/mining town) are these two canaries;
QBE and Genworth.
Between them, they have the Lenders’ Mortgage Insurance (LMI) market sewn up in Australia. This is the insurance which pays out to the bank when someone defaults on their house loan. One might reasonably expect a significant negative change in the trend to show up in their performance.
Nothing worth getting excited over just yet, judging by QBE’s share price.
The Australian arm of Genworth isn’t listed separately on the Australian stock market, however a planned IPO seems to have been parked. I wonder what story that is telling us?
In the meantime, personal experience shows that the rental market is going nowhere in Sydney; our landlord has rolled over for a third year without an increase and the place next door is empty now for its 5th month.