More and more NSW off the plan developments are in the news, with buyers made to make additional payments to secure the property, when developers rescind the contract under a 'sunset clause'. Sunset clause allows for either the buyer or the developer to pull out of the contract, if the completion date is not met within a given time period.
There are reports that once rescinded, same properties get advertised back on the market at a higher price to increase the profit margin of the developer.
This can leave the buyers at a disadvantage at times when property prices go up, as their deposit money get tied up for a long period, and they will be required to come up with a higher deposit than previous time to secure a similar property.
Buying off the plan is a risky and speculative investment strategy and if you plan to buy property off the plan, make sure that you consult a property lawyer, as off the plan contracts can greatly favour the developer.
Australian Property Selectors do not buy off the plan properties, but use more effective and safe strategies like buying existing cheaper properties that are located close proximity to new developments.
Good read below from CM Lawyers on - what should be checked before buying off the plan property?
Domain group Senior economist Dr Andrew Wilson, predicts solid growth for Sydney in 2015 as well fuelled by low interest rates, increased investor activity and high level of immigration.
In 2013 Sydney prices recorded a growth of 15.4%, and in 2014 an increase of 14%. Wilson forecast the following growth rates for Sydney regions in 2015;
The 2015 auction clearance rates were at record levels in late summer and this is expected to continue into autumn as well, with boom-time conditions continuing without a slowdown.
At Australian Property Selectors, we caution the investors blindly following the market and emphasize the need to select investment properties for the right reasons. The rents in Sydney have not kept up to the pace with the capital growth in last two years, resulting in low rental yields. Therefore some of the properties sold now will end up draining cash on a monthly basis, from the investors.
We are bullish on pockets of Sydney which are having massive infrastructure developments and employment creation, which will do well in terms of both rent and capital growth. Contact us today, for an obligation free consultation to understand how Australian Property Selectors can enable you to achieve your property investment goals.
Read the full article at http://goo.gl/8tiLDi
$1.5 million to get a Sydney 3 bed house or a French castle in Bordeaux, is an interesting comparison.
APRA and ASIC made the headlines announcing the that they have put banks on notice, and they will be cracking down on high risk home lending.
The banking regulator APRA and the corporate regulator ASIC say they are taking coordinated action to ensure that banks and other lenders are not making home loans which borrowers might struggle to repay.
Interest-only loans reached a record high of 42.5 per cent of all home loans in the September quarter this year.