This is going to be a very interesting year !!!!
Last week we put together a deal where the Bank forced the developer to onsell a completed project valued at $30mill for a steal at $14mill complete … the developer was committed heavily else where and had no choice …
This will flow down to the mum and dad investors in our Western suburbs locations in the top CBD areas around the Country …
There are many scavengers ready to ponce on the fallen … is this fair or just a great opportunity to make money ??
D
The law of the jungle applies – however it does have many implications: the purchaser can only write down depreciation on the value of what they have bought ie the discounted price, the purchaser will onsell the units at their true market value (not at the heavily discounted/get out of gaol price at which it was purchased), valuers will have to disregard this sale as it was a distressed sale (and may have been off market).
The losers are those who had heavily invested with the developer (unless there was still some cream in the can). The winner will be the buyer of the development (who then holds & onsells the project at market value). The neutral are the mums & dads who will end up buying their share of the property at market as the profit has already been lost, then remade. Depending upon who the developer was, maybe our super funds (ie ourselves) will lose.
Another good reason to not put heaps into the "stuper funds".
The investment of the poor.
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