Today, we will revisit the risk factors with new apartments and deep dive into how developers that focus on profit can really affect your valuation.

Key items:

So who are all the parties involved in a new build? 

• Developer
• Development manager
• Project manager
• Builder and subcontractors
• Sales and marketing

How do these affect your price?

Each of these players is out to run a business and so their profit sits within the purchase price of your property. As an example, when you generally buy a new apartment there can be a sales commission of 2% all the way to 15%. These are cost inbuilt into your apartment price that isn't reflected in the fixtures and fittings of the place. Herein lies the risk of bank valuers, who know these tricks and provide lower results (which can leave you financially ruined!). 

What stories have we heard? 

Hear about the Rolex Watch story, the $18k gift and more tactics that we have seen occur in the murky world of a new apartment builds.

What else?
We talk about value management, rental guarantees, and how the builder can change his mind using the 'artist impression' tactic and also all the clauses that allow them to do so.

So why do people buy new apartments? 

• First homeowner grants is a big one
• It's nice and new
• It's in a good area
• I get a rental guarantee

We say, these are nice to have but it's not worth it in the event your property goes down in value.

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