Most expensive home in US defaults on $224m loans


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Aussie ETF market shifts up a gear, and experts get behind vaccine passports.

Here are five things you might have missed this week.

Property bubble set to continue

most expensive home in the us defaults bel air

Experts expect a $76,000 increase in property prices over the next year, according to the September edition of Finder's RBA Cash Rate survey.

The vast majority (86%) of the 40 experts and economists surveyed believe that Melbourne will see the greatest price hike: 9%, which would take the average price of a home to $817,114.

The predicted 8% increase in Sydney would see property prices increase another $76,619 on average.

"In both Sydney and Melbourne, the number of houses sold per month remained relatively flat through 2020 and early 2021, before skyrocketing when lockdowns were lifted," says Graham Cooke, head of consumer research at Finder.

"After lockdowns were eased, the number of properties being sold increased by around a quarter. In other words, while lockdowns didn't dampen the housing market much, the ending of them lit a fire that is still going," Cooke said.

Owner of most expensive home defaults

The owner of the most expensive home in the United States has defaulted on $AUD224 million in loans and debt, forcing the Los Angeles County Superior Court to place it into receivership.

Developed by Nile Niami, and touted as "the most expensive home in the developed world", the 9754 square metre Bel Air house was expected to hit the market in 2017 with a price tag of US$500 million - about $680 million Australian dollars.

Aussie ETF industry to hit $200 billion

Self-directed or retail investors are swarming to ETFs, with a VanEck survey revealing that 96% plan to use ETFs in their portfolios.

Moreover, 31% said they would maintain their current investment in ETFs while less than 1% said they would reduce their investment.

"Also reflecting their strong appeal, 89% of respondents said they would recommend ETFs to other investors, reinforcing that ETFs are the topic du jour when talking investments," says Arian Neiron, CEO of VanEck Asia Pacific.

By contrast, only 6% of respondents said they did not invest in ETFs because they prefer to invest in managed funds or other investment products.

"The expected increase in usage will drive further growth of the ETF market in Australia as it heads towards a market capitalisation of $140 billion by end of 2021 and $200 billion in the next two years."

Vaccine passports needed for economic recovery

Eight in 10 experts believe vaccine passports will be our ticket to economic recovery, according to this month's Finder RBA Cash Rate survey.

Putting a dampener on interstate Christmas celebrations, 70% of the 40 experts surveyed don't expect the borders to open up until next year.

"We've all got used to signing in at venues," observes Graham Cooke, head of consumer research at Finder

"Not only is that process likely here to stay, I'd expect it to get more complicated. Even if it means longer lines at bars, restaurants and music venues, many of us will be willing to bear it if it means we can get out and enjoy life again."

International tourists should also be allowed to visit in 2022 if they are fully vaccinated without having to undergo hotel quarantine, according to 84% of respondents.

"If tourists are fully vaccinated, and we open up the economy once we reach the planned vaccination rates, then the risk of death is materially reduced and life should, and must go on, as normal as possible," says Peter Boehm of CSA Premium.

Suncorp unveils BNPL product

From November, Suncorp customers will have access to PayLater, an interest-free buy now, pay later service that can be used to make payments at more than 70 million merchant locations worldwide, wherever Visa is accepted.

Eligible customers will be able to apply online or via the Suncorp App, with an assessment to follow that will include a credit check to determine customer eligibility.

"Some customers prefer to use credit cards, while others want simple, short-term payment options from a trusted and secure bank," says Suncorp Bank CEO Clive van Horen.

"This solution is also a win for Australian businesses, many of whom are doing it tough right now as we learn to live with COVID-19. Our PayLater offering eliminates additional costs to those businesses who are currently paying millions of dollars in traditional BNPL fees."

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David Thornton was a journalist at Money from September 2019 to November 2021. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.