I was at the Place in the Sun exhibition in London last week (3rd April), and while the attendance numbers seemed to be holding up, the buzz on the floor of previous years was definately lacking.
My opinion is that a massive decline in the off plan property investment model was at the root of this.
The British and the Irish don’t seem to be interested in putting down deposits for properties due to be built in 2-4 years anymore and for a variety of good reasons.
Firstly, many of the offplan purchases they made from 2003-2008 have either not been built or have not achieved anywhere near the rental income promised. Secondly, it is now extremely risky to assume that they will get bank financing to pay the final 60-80% deposit on completion. Thirdly, why would they want to purchase an offplan property when they can buy a finished property from a distressed vendor at a much lower price?
For example, Torcana is now selling fully finished and tenanted properties in wealthy Orlando suburbs that are significantly cheaper than offplan properties that were promoted in Romania just six months ago.
Who’d have thought that could ever happen?
Kind Regards
Colin Murphy
Director
Torcana Ltd
Tags: distressed property, offplan property, property exhibition
