The number of apartments due for settlement is ballooning – and concern is rising about whether buyers will be able to pay for them, but big developers say the rise in value is mitigating that risk, writes Michael Bleby.
The number of apartments due for settlement is ballooning and, despite the soothing words from Lend Lease and Mirvac at the half-year results, concern is rising about whether buyers will be able to pay for them.
An estimated 44,784 apartments are due for completion and settlement this calendar year across Sydney, Melbourne and Brisbane, up almost a quarter on last year’s 36,486, according to figures from planning consultancy MacroPlan.
Next year they will jump again to 52,920, the figures – based on previous apartment approvals – suggest.
But the surge in settlements – this year alone will see four times as many apartments settle as the 11,145 of 2010 – at a time when banks are tightening credit, brings the prospect that buyers who paid a 10 per cent deposit two years ago and were counting on a 90 per cent loan to meet the remainder now due will have to stump up more. If they can’t, they may have to sell them into a weakening market.
MacroPlan’s experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities. Contact Wayne Gersbach, General Manager – NSW, today to discuss your property research requirements.