A new platform will allow property buyers who have made down payments on their off-the-plan properties the opportunity to on-sell their investment via nomination before settlement.
The platform, Aofun.com.au, is a direct response to the growing number of buyers who may have difficulty settling on their off-the-plan property purchases. The online portal aims to create a solution in the form of an open market platform which will allow sellers to reach out to a wide network of potential new property buyers.
Aofun founder and CEO Jason Zhu notes that many of these potential sellers are overseas investors who have been “caught out” by the major Australian banks’ decision to freeze lending to foreign investors.
“Many of these potential sellers would have bought an off-the-plan property in the past few years and now find the settlement date looming while they have little or no chance of securing finance.
“The nominee sale platform on Aofun.com.au is designed to provide an open and transparent marketplace where sellers and buyers can trade freely.”
He noted astute investors will be able to pick-up bargains, with some sellers willing to forego the full 10 per cent deposit, and then some.
“In particular, there is a real opportunity for first home buyers who may not have sufficient savings for their first home to register on the website and acquire their first home with the deposit paid,” he continued.
The portal will also give developers another vehicle to on-sell their properties when the original buyers cannot settle.
Although in most instances the overseas buyers have already paid, on average, a 10 per cent deposit, there will be circumstances where they may be willing to sell below the contract amount to avoid a potential lawsuit from the developer, or receiving a bad credit rating, which Mr Zhu noted could “have negative implications for any future immigration application to Australia or investment in Australia”.
“The reality facing the market is that many of the overseas buyers for these properties, for various reasons, are not going to be able to complete their purchases, leading to an oversupply that will inevitably place a sizeable burden on the property and construction industries,” he said.
According to the most recent figures from CoreLogic , in the next 12 months around 92,000 units will need to be settled — looking forward 24 months, this figure jumps to 231,129.