Home News Off-the-plan apartments could cause property prices to plunge

Off-the-plan apartments could cause property prices to plunge

Font size :

A huge number of brand new off-the-plan apartments could be forced into the market by existing buyers struggling to gain the necessary financing despite paying deposits months ago, potentially causing property prices to take a dip.

According to the Australian Financial Review, Chinese buyers’ funding from Australian banks have been frozen, leaving them with the prospect of foreclosure. Having already paid the deposit, those property buyers now need to get their apartments valued and secure funding to complete the sale, but that appears unlikely. 

In the recent months, Australia’s big four banks--Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank Ltd, and Westpac Banking Corp--have all stopped lending to property buyers with foreign income due to the rise of sloppy applications and widespread fears of fraudulent activity.

As a result, some might be forced to foreclose, while others could default or take on much higher interest rate loans from small lenders. This could also force developers to go bankrupt, property prices to plunge due to a supply glut, and banks’ bad debts to rise. Many foreign buyers might also abandon the Australian property market altogether.

To remedy this problem, a number of offshore financiers based in Singapore or Malaysia are now offering rescue packages for the borrower, but they are also lending funds at higher rates or buying apartments off distressed borrowers at discounted prices.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

Mortgage applications drop in second quarter Mortgage applications drop in second quarter

This marks the “beginning” of a downward trend, says Equifax executive Read more

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates ... Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

NAB slashes growth forecasts for houses, units NAB slashes growth forecasts for houses, units Numerous factors, including tighter credit rules and the growing supply of new stock, have reined in Australia’s seemingly unstoppable housing market boom ... Read more

More mortgage news and articles

Sponsored Links

Saturday, Jul 22, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords