There has been significant industry talk in recent times about the oversupply of units, particularly in Sydney and Melbourne. Here is Core Logics most recent media release (16/5) about the amount of apartments that need to settle in the next 12-24 months (data up until April).
It is staggering to know that over 80,000 apartments need to settle in the next 24 months in Melbourne and Sydney. Also Brisbane is over 40,000 and considering it settled around 15,000 over the last 2 years on average.
I believe the biggest concern is with the recent changes in non-resident lending, many of these pre-sale purchasers not being able to settle, as only 1 known bank still lend to non-resident borrowers who derive income from overseas.
The risk of settlements not occurring and thousands of apartments going back onto the market is real.
We have started to educate our Developer clients about the potential settlement risk and insist early communication to any clients that may have issues at settlement be flagged now and addressed.
If Developers have a settlement 6+ months away, communication must start now with all clients and we can assist to identify these risks and how to overcome them.
If Developers have a settlement within 6 months and haven't educated clients and identified settlement risks, you are behind the 8 ball.
At My Mortgage Freedom we are fortunate to have access to lenders who may not be accessible to brokers and can provide a solution for some of these clients approaching settlement.
If you have any further queries please feel free to contact Anthony at My Mortgage Freedom