One in 20 fail to settle Melbourne OTP purchases

One in 20 fail to settle Melbourne OTP purchases
One in 20 fail to settle Melbourne OTP purchases

One in 20 off-the-plan buyers walked away from their Melbourne apartment purchases in June, according to the law firm, Maddocks.

The law firm processed over 800 apartments contracts in June.

They recorded that 5 per cent of the purchases did not settle on their apartment.

The historical average was about 3 percent.

It record of default rates sat at 2 percent between February and April, when volumes were lower.

Of those buyers who did not settle in June, roughly two-thirds were foreign-based, The Australian Financial Review noted.

The Maddocks firm handles about 15 percent of all off-the-plan sales in Melbourne each year worth around $3 billion.

Its development practice partner, Nick Holuigue, played down the rise in defaults.

"Our figures don't show any dramatic increase in settlement defaults, despite the usual big rise in settlement volumes in June," he said.

"They show that despite the banks changing or tightening their lending policies and the media talking up the risk of rising defaults, buyers – including foreign buyers – are still settling their contracts and sourcing finance where required.

"The only thing we are hearing from developers and experiencing ourselves is that foreign buyers are perhaps taking a little longer to settle.

"Nothing we are experiencing in our dealings with a variety of buyers' representatives give us cause for concern that our developer client's FIRB-approved buyers are going to be unable to settle."

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Off the plan Residential Sales

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