Warning to home-buyers: get-out clause can lift cost
Sunday 29 February 2004
A smart practice widely condemned when it was adopted by a property developer in Queenstown has found its way to Christchurch.
By The LandlordBuyers who had paid deposits on the first 48 sections in the Ellington Estate Development in Mairehau-Shirley have been told their contracts are no longer valid after the developer failed to get a resource consent by February 20.
A get-out clause in Ellington's contract with section buyers allows the developer to break the contracts even though the buyers believed a deposit had secured the land.
The practice was criticised last year after it was highlighted in a wrangle over a large Lake Hawea development, when Queenstown developer Chris Streat cancelled purchase contracts on 15 sections in the Grandview subdivision.
He then upped the individual section prices by as much as $40,500.
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There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Vacancy rates in the commercial property sector are set to increase as changing economic conditions dampen demand.
LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.