Off the plan sales in jeopardy: HIA

Off-the-plan sales could be at risk, and jobs could be lost, because of a Supreme Court decision that buyers can cancel building contracts and get their deposits back if projects are not completed in time.

The Housing Industry Association’s Victorian Executive Gil King said the ruling “showed no understanding of the significant barriers already faced by builders”.

“This decision could not have come at a worse time for the residential construction industry,” according tot he lobbyist.

“[It] puts projects, and thereby jobs, at risk, and may put the entire future of off-the-plan sales in jeopardy.

“There are many factors outside the control of the builder that can affect the timeframes when building is completed.

“These include unpredictable weather, criminal damage and delays caused by authorities.

The executive added off-the-plan sales were crucial for meeting the State government’s planning objective of creating medium to higher-density housing in metropolitan Melbourne, and this decision was a severe setback.

“Off-the-plan sales have been very attractive to young first home buyers opting for apartments in inner city areas,” Mr King said.

“Projects will now be under enormous pressure and banks will be more reluctant to loan, inevitably resulting in builders pulling out from the market and jobs being lost,” he added.

“HIA is calling on the Victorian Government to amend the Sale of Land Act to take into account the risks and delays outside of the builder’s control”.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.

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