Off-the-plan Segment To Remain Strong

Sydney’s high-density off-the-plan segment has given critics something to throw themselves at but any predictions about a looming crisis may be premature. A piece on BIS Shrapnel’s website confirms that the high density market is likely to remain as strong in the coming couple of years. A lot of this can be put down to high rental yields, low vacancy rates and interest rates apart from anticipation of capital gains.

Off-the-plan to remain as strong

By the time RBA begins the interest rate escalation, vacancy rates will ease and hence minimise the pressure there may be on the price quotient. In a year from 31^st March 2013, number of approvals for ‘off-the-plan’ has more than doubled- from 9,932 to 20,354. The dynamics are such that peaking cash rates, somewhere around the 2016 period, will cool off the market (first by weakening demand and then by affecting the prices).

You can read the original article here.

Compliance difficulties

I think we also have to be cautious about the red tape and the compliance difficulties involved in the off-the-plan segment. Inarguably, this makes the end-price steeper for the purchaser. Off-the-plan developments are the ones beset with a fair share of civil lawsuits, too.

In my opinion, lawsuits arising from Sunset Clauses and conveyancers’ investigation will not end till the time the developers deal with the process delinquently. These are important points to ponder, too.