Price shift leaves many short
Property data suggests a majority of off-the-plan apartments are worth less than their purchase price.
Property data provider CoreLogic says 60 per cent of off-the-plan apartments in Sydney, and 52.9 per cent in Melbourne, were valued lower than their contract price at the time of settlement.
It means that nearly a third of off-the-plan buyers in Sydney are moving into new apartments worth at least 10 per cent less than the price they purchased them for.
It is a big jump from the average 16 per cent of newly constructed NSW units being valued below contract price after they were completed two years ago.
In Queensland, that rate is 43.1 per cent of units, and in Western Australia it is 22.5 per cent of apartments.
CoreLogic head of research, Tim Lawless, says the market was very different when many of these newly completed apartments were originally sold off the plan.
“We were seeing values rising at about 15 to 20 per cent per annum in Sydney and Melbourne,” Mr Lawless has told the ABC.
“Now cast your mind forward to 2019 and we've seen prices come down in Sydney by 15 per cent. In Melbourne, they're down by about 11 per cent.
“A lot of those off-the-plan buyers have seen a very fundamental shift in the value of the project that they purchased a couple of years ago.”