The cracks first appeared in the buildings. Now they have begun to spread across the industry.
Lured by the prospect of easy profits in a booming market, property investors snapped up units off the plan, armed with a small deposit and in many cases a non-binding assurance from a financier, usually a bank. While the bank may lend money, often it will only be for a reduced amount, leaving the buyer scrambling to raise the extra cash to buy an overvalued apartment.As an off-the-plan buyer, however, there is a legal obligation to take the unit. Either they cough up the full, final payment or face default, which results in losing the deposit and being potentially exposed to legal action to recover the full amount.
That was way above levels of a year earlier. Not surprisingly, there were far more under water for less than 10 per cent. About half of all units up for settlement came up short of the agreed contract price.For smaller, privately owned developers, like Ralan, this creates the kind of liquidity crisis from which there is no recovery.Australia's housing downturn appears to be over … for now. But huge household debts leave the nation vulnerable to a shock.
This is a disaster. Our cities need to increase their housing density for a range of reasons, and tower blocks are part of that solution. Now, no-one will have confidence to by apartments. It will set urban planning back decades.
Serves you right. No sympathy at all.
Immigration levels would breath new life into the housing bubble?
If UBS banks forecast is right for 100,000 jobs lost we face economic destruction for the foreseeable future!
Real estate developers & constructors suck up value & create the next recessions & slums.
Helter skelter
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