Sydney Property Market Update 29/06/2019
Much has been written in the past two weeks about the plight of the current residents and owners of the apartments at Mascot Towers.
I could write about this topic forever but I’ll try to keep my comments succinct and to the point.
Let me first say there are many highly reputable builders and developers responsible for some of the most well-constructed and cutting edge complexes across Sydney. I have represented several myself over the years and when done well nothing is as satisfying and exciting as buying and owning a quality brand new apartment.
Where all the problems start unfortunately is with the inconsistent approvals process. Local Councils and Planning Departments should have a coherent and uniform system in which developments are approved and signed off on when completed but in my experience as a selling agent this is sadly not the case. This in effect allows for too great a discrepancy to occur between those complexes which have tried to satisfy all the prescribed requirements and those that haven’t. Put simply in layman’s terms the current set-up is too easy for the unscrupulous, cost cutting and outright fraudulent operator to get away with selling an inferior product to the consumer.
What makes things even more complicated is the State Government has its own conflict of interest in effectively dealing with the problem.
You see it’s a little thing called Stamp Duty.
Last year New South Wales raked in over $8 billion from it! That’s right, over one third of the annual revenue collected for the entire state. This over reliance leads to an unconscious bias towards the creation of more dwellings because every new apartment built equals another paying entrant into the NSW property game. And the more players in the game the more revenue flowing into the government coffers.
The other element of the recent debacle in Mascot is the knee jerk reactive approach taken by the government in dealing with it. It’s very noble to stand in front of a pack of journalists and authoritatively announce a bailout package involving long term interest free loans in the millions of dollars along with alternative accommodation allowances but my question is this – where’s the bailout package for the huge number of other apartment owners across the state who are experiencing very similar financial distress from major issues with new apartment buildings ?
A great article written by Michael Bleby late last year when the now infamous Opal Tower fiasco in Homebush played out over Christmas summarised perfectly how broken the current system is. It basically outlines how someone who buys a fridge has far more consumer protection safe guards in this state than an apartment buyer.
Finally, and this is a sensitive comment to make to all buyers, but…………………………do your homework !
I sold an excellent block of forty-three apartments off the plan in a development called “Enmore Park” around 7 years ago and out of the two hundred plus buyer enquiries how many of them do you think asked me for anything detailed about the bona fides or previous track record of the builder?
Two! That’s right, less than one percent. Just crazy.
If anyone currently looking today to buy an apartment off the plan from the same builder of Mascot Towers knocked on the door and spoke to its current residents what do you think they would say and the result would be? Do you think they'd still go ahead and purchase off that same builder?
Always, always, always do your due diligence.
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