It will certainly be interesting if people try to sell out of their position, they could well be carrying a fair bit of debt, when offloading. That is if there are buyers, as investors will be scarce, the price fall may well accelerate. IMONearly half of new apartments in Sydney and Melbourne are now valued less than what the buyer paid off-the-plan.
https://www.news.com.au/finance/bus...t/news-story/4abe890c87a405964057f74af9d6f166
With these off the plan apartment purchases, can you just forfeit the deposit and walk away?
N
$1M Purchase price 10% deposit, bank LVR 80% - at the time of purchase buyer did not have the other 10% required, however they thought on time of completion the property would have gone up %10, hence when it came to settlement they had the 20% equity in the property (10% deposit + 10% instant equity)
12 months FREE capital losses.I very, very briefly worked for a group who sold OTP properties in the outer suburbs of Melbourne. One of their big selling points was that you get "12 months of free capital growth" whilst the property is being constructed. I used to cringe whenever I heard it.
Thanks for that advice. I daresay there must be a quite a few people waiting out this miserable experience.NO you cannot, developers has the right to take you to court for any loses.
Ie Purchased for $1M, 10% Deposit $100K, you walk away, Dev keeps the deposit, then Dev puts property back onto the market and sells if for $800K, they come chasing you for the difference $100K.
But the real issue is the banks, in the above case say the property is valued at $900K at time of completion. You the purchaser now have 0% equity and the bank will not loan you 100% so you default.
To complicate things further, say the bank required you to have 20% deposit on purchase. On settlement the value is $900K, you still have $100K left, but bank requires you to have $180K/20% of the value of the property at time of completion, you need to come up with another $80K.
This is in reverse to how everyone who bought thought it would work.
In the above example most buyers thought it would work like this:
$1M Purchase price 10% deposit, bank LVR 80% - at the time of purchase buyer did not have the other 10% required, however they thought on time of completion the property would have gone up %10, hence when it came to settlement they had the 20% equity in the property (10% deposit + 10% instant equity)
You can see how this can unwind fast.
It makes me wonder what happens to those who bought off a plan and the building does not go ahead or is subject to long start up delays.
During the property boom, some unscrupulous builders deliberately delayed their build, hit the sunset date, so they could relist the same properties at a new, higher price.
Almost 10 years from this thread and about 4 years from the previous and we are finally here!
Well maybe.
Like I said before I think we will float till after the election and we get a better idea of government direction.
Well affordability is back, here is a post on some prices, in the State capitals.
https://www.msn.com/en-au/money/hom...our-capital-cities/ar-BBUYSU4?ocid=spartandhp
As usual, some areas will go back, some wont.They went from about $150k to
$1million in my area over 20 years. I'd like to see it well back under $500k.
A lot of stuff needs to go wrong for that to happen though.
Compare two houses.20 years ago, people realised it is land value that matters, not the house.
Wait for the next hit when the NG changes come.Some houses I was looking at in 2014 for average of $250k (one area) still over the $500k mark. Seems to be holding up atm. Its one of those areas that the bottom should drop out of as well.
Kind of my bellwether for the broader area.
I think it can hit $250k again.
Royal Caribbean are increasing the number of cruises from the East Coast next year, due to excessive demand, people have just changed their focus from housing to enjoying the moment.Something completely irrelevant:
I noticed lotto jackpots are hitting highs a lot quicker. I wonder if it could indicate the numbers struggling and getting desperate.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?