Higher equity required for offshore Chinese buyers settling off-the-plan apartments

Higher equity required for offshore Chinese buyers settling off-the-plan apartments
Higher equity required for offshore Chinese buyers settling off-the-plan apartments

An off-the-plan purchase of an apartment near Monash University in Melbourne by a Chinese based buyer is caught up in the emerging settlement risk scenario.

The off-the-plan sale for $600,000 is keeping the buyer up at night. Liu Jiabing planned for his daughter’s education when he helped her to get an Offer to enrol next year, and then bought an apartment in Melbourne that is due to settle next month.

“At the very first, I was told I only had to pay 20 percent downpayment,’’ said the buyer, Mr Liu, who works at a prestige foreign language school in Nanjing, in China’s east.

He told The Australian the financiers then told him to pay 30 percent, "and later 40 percent, as the banks won’t lend and we have to borrow from small ­financial organisations.

“Last night I was told I have to pay 55 percent for down-­payment.

"But how am I supposed to find so much in cash in such a short time? I still have to pay my daughter’s university fees.”

Mr Liu is among the Chin­ese parents who buy new off-the-plan apartments before sending their children to Aus­tralian universities.

AC Property, a Melboune-based property portal, has been taking four or five calls every day from buyers who seek to resell their off-the-plan apartments after finding it hard to settle, the newspaper reported.

“We have been referring our clients to mortgage brokers to see if they can get alternative finance, but we haven’t seen a single case of success so far,” said AC Property ­director Esther Yong.

In once case parents, based in Guangzhou, in China’s south, have already missed the settlement deadline of July 18 for the apartment they bought for $440,000.

The developer is now charging them about $150 a day as penalty, which is pushing Mr Li to resell as soon as possible.

The Australian columnist he Chinese link to the looming apartment glut puts the education sector and Australia's international reputation "in peril."

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.

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Off the plan China

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