News

June 16, 2017

OTP Lending Changes – Market Expose

Falling Off-The-Plan Settlement rates for Investors


Popularity in buying off-the-plan (OTP) among investors has increased rapidly in recent times. Most recently, the RBA (Reserve Bank of Australia) has flagged this type of investment in Sydney and Melbourne as high-risk.

The changes apply to conditions surrounding property valuations needed for OTP loans. It is the most recent tightening in terms and conditions for investors from lenders. 

JUN 2017 ME01 Market Expose SydneyLinks Real Estate Off-The-Plan Lending Changes.jpg 

An artists impression of the view from Potts Points' newest development, Omnia.
 

“The market is now saying less loan amount and more cash,” says SydneyLinks' Trisiana Muljono. OTP properties are providing lower returns when compared with existing property.

The lending tightening has been implemented fast with lenders responding strictly to the changes. Falling OTP settlement rates could have more of a ripple effect if high numbers of original OTP buyers can’t settle the purchase.

Be aware of the changes to this type of lending and consider how your property agent may be able to uncover higher rental returns to help valuations.

For help with your future investments contact Trisiana Muljono or Simon Hohen at SydneyLinks.

 


The SydneyLinks team
194 -196 Victoria Street Potts Point NSW 2011
02 8302 3000