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Property group warns of buying off the plan

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Australian Broker | 16 Nov 2016, 07:00 AM Agree 0
New data suggests that off-the-plan apartments could lose up to 15% in value before settlement, putting mortgage holders at risk
  • Jerry | 16 Nov 2016, 09:18 AM Agree 0
    A ridiculous statement, you cannot blanket this entire property type, there are too many factors at play, estimated cost of construction, market cycle, site purchase price etc. I've bought 4 off plan and they have been worth 10-20% more come settlement, that and my gross yields are significantly better than my existing properties.
  • Aaron | 16 Nov 2016, 11:16 AM Agree 0
    It's a "warning", and very timely given the current investment lending landscape. Borrowing is certainly more difficult for investors than it was 12 months ago and a potential valuation below COS adds an extra layer of complexity.
  • Broker | 16 Nov 2016, 12:29 PM Agree 0
    It is very rare for a Valuer to value any off the plan apartment purchase at purchase price , this is going to create major headaches for a lot of ( non cashed up) purchasers with upcoming settlements over the next year or so. Then add into the mix the recent overseas buyers lending restrictions ( in most cases down from 80% LVR to 0% LVR) will see this space get very messy.
  • Robbie C | 19 Nov 2016, 11:33 AM Agree 0
    Cost of construction and site purchase price rarely influence the market value of the completed product. The purchaser does not care about the developers costs. Many development companies have overexposed themselves with this type of thinking and resulted in insolvency. Well that is in my neck of the woods in FNQ anyway.
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