Hi
I was flicking through the Australian yesterday, and my jaw dropped when I saw this…
http://www.theaustralian.news.com.au/common/story_page/0,5744,8950995%255E2702,00.html
To cut a long story short, VCAT ruled that a big apartment developer could not enforce a contract of sale, or even get access to the deposit bond, because a loophole in a 1995 law forbids any more than a 5% deposit.
I just couldn’t help but think what this could do Victorian property developers, off-the-plan property spruikers, and potentially the Victorian property market as a whole if the loophole stays in place.
As a result, the Victorian Government is looking at backdating legislation changes which could close the loophole – leaving Mum and Dad investors bearing the loss of “apartment prices [which] are already in free-fall”.
Interesting, ‘eh?
Brent
Hi Brent,
Read the article too – the potential outcome with either scenario has significant implications for both the developers and/or investors depending upon the outcome.
Victoria is going to either end up with overcommitted mums and dads or broke developers – either way there could be some ‘firesales’ soon.
Derek
I have never been to Melbourne and seen these apartments or where they are etc etc. If the price collapses would you think they would be a good long term opportunity? Will you be able to find a tenant to earn income of any sort?
The vacancy rate is running at 10% or so at present for Docklands, so you may be able to find a tenant but you will have to offer a healthy discount to get one in.
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