The CEO of iBuyNew, Mark Mendel has recently appeared in an article, ‘Real estate agent predicts people could walk away from deposits’
featured on the Your Investment Property website on 11 December 2015.
It has been predicted by Douglas Driscoll, from real estate agency Starr Partners that in 2016 people could start to walk away from their property deposits that they have placed on off the plan apartments that have yet to be built, due to buyers believing that their prospective purchase is overvalued. However, according to Mark Mendel this is not necessarily the case.
Mendel explains that it is important to look back in time and review the history of the Sydney property cycle, which shows evidence of strong growth over three to four years followed by a period of six or seven years where the market starts to slow down a bit.
In the lead up to 2016, we have seen the Sydney property market begin to slow down after its epic boom over the last few years, and this is where investors will focus more on receiving rental returns until capital growth picks up again.
Walking away from a deposit of $70,000 or even $80,000 is a huge amount of money to walk away from, and Mendel believes that people are not at the stage of wanting to lose their deposit.
What Mendel does predict might occur is that some developers who have previously bought land might end up handing the land back. However, the population in Sydney is still strong and there is still a high demand for residential supply, so the chance of Sydney suffering from an oversupply issue is not very likely.
Read the full article here: Real estate agent predicts people could walk away from deposits