- by Chan & Naylor
- in Chan & Naylor Media Coverage Property Investment Property Market Updates Wealth Creation
TV MEDIA INTERVIEW: Ross Greenwood talks to Peter Ristevski in special report on Off the Plan Properties
“Breathtaking views to wake up to everyday.”
“This is the top of the latest and last development at Bennelong Point, just behind the opera house.One hundred and four (104) apartments still under construction, all expected to sell off the plan – and quickly.”
“You take the CBD apartments where we are standing in here at the moment. If you look at the product that’s been produced in the last five years, there’s less than 50 apartments that are actually available and sold off the plan.”
“But this is top of the market.”
In other areas, there are pressures. In some places, banks are tightening up on developers and asking buyers to stump up more money.
Banks have told these developers not to put these a lot of these units back on the market because it will cause a major glut.
“But for many, there’s an escape clause.”
“With average annual double digit growth buyers can cash in. And in many areas, there are still many willing buyers.”
“So its a very easy investment, but its also a bit of an outlay, and obviously if the markets be, its a not brainer.”
“Off the plan buyers , generally put down a 10 % deposit often two years in advance.
Say the apartment is worth $1m, 10% down is $100,000 – you pay the rest when its finished. Let’s say prices rise 30%, before the apartment is finished.
If it is ever sold, the off the plan buyer turns their $100,000 into $300,000 – they’d never have to stump up the extra $900,000 to complete the sale.”
“The risk is, that prices fall.”
“A 10% drop will see your $100,000 deposit wiped out and they’re still contracted to stump up the extra $900,000.”
“When you Purchase an apartment today, you are not going to settle on that apartment because you’re buying off the plan, approximately two to three years time – so who knows where the market is going to be.”
“And that s the gamble many off the plan speculators will win or lose by.”
Ross Greenwood, 9News.