New Laws for off-the-plan buyers
NSW home buyers purchasing residential properties off-the-plan will benefit from stronger protections under new laws endorsed by Parliament this week. The changes to the Conveyancing Act affect disclosures, cooling off periods, holding of deposits and sunset clauses. It’s interesting to reflect that the number of off-the-plan sales has increased from just over 2,000 in 2006/07 to nearly 30,000 in the last financial year, which accounts for about 12% of all residential property sales in NSW.
The updated laws will establish new minimum disclosure standards. They also give the Supreme Court additional powers, the reforms include:
- Buyers being provided with a copy of the proposed plan, proposed by-laws and a schedule of finishes before contracts are signed;
- Vendors providing a copy of the final plan (and notice of changes) at least 21 days before the buyer can be compelled to settle;
- Allowing buyers to terminate the contract or claim compensation if they are materially impacted by changes made from what was disclosed;
- Widening existing legislation to clarify that the Supreme Court can award damages where the vendor terminates under a sunset clause; and
- Extending the cooling off period to 10 business days with any deposit to be held in a controlled account.
Mum & Dad Loans
Housing finance is a big issue and in particular for first time buyers and it’s not a surprise to find that mum and dad playing a very important role to help their kids. Australian parents and grandparents are making big financial sacrifices, even delaying retirement plans, to help their children buy their first home. In order to help parents are reducing their own spending, forgoing buying a new car, or going on holidays and many are also acting as guarantor on home loans. Financial help can include cash, an interest free loan or rent-free accommodation at home or in an investment property. One common helping hand is to help children lift their deposit from 10% to 20% to boost prospects of securing a home loan. This trend is set to continue to be an important part of the market.
Like many of our cities in the US there’s pressure to increase urban density by ‘up-zoning’ planning laws. The aim is often to improve housing shortage by increasing density and constructing new medium and high-density housing but, it’s often a controversial process. Updated zoning guidelines often allow triplexes to be built across many established areas dominated by detached-homes and allow even high-density developments close to established transport links. As we have seen in Sydney these plans are complained about because up-zoning would ruin the character of existing communities. Opponents also argue that up-zoning does not lower cost of producing more affordable housing. There’s a housing problem in nearly every city in the United States and many have entertained large scale up-zoning only to encounter road-blocks when it comes to local community attitudes to these plans. Again, this is something that sounds very familiar.
Thursday Trends a Change
This is the final Thursday Trends for Project Agenda. For 2019 there’ll be a new monthly trends format and a regular summary of some of the most recent sales from across Sydney and other cities.