Buying an OTP apartment Brisbane-Need advice

Hey all,

I am FHB and have sourced an OTP apartment in Brisbane.Its 420k for a 2-2-1 configuration.
I have been reading that OTP's are really risky for FHB's and for people with low deposits.

Also this apartment as per the agent is due to be completed in 1 month so I checked the building which is complete(externally) as he says.So I am assuming it to be true.But the site is still under construction fencing.

I have not signed any contract yet so nothing is legally binding.Just an expression of interest and 1k for that.

My question would be:-

Assuming I go to a lender and get a conditional loan approval for 380k subject to valuation.(20k my deposit,20k FHOG,lets leave out buying costs and LMI for now)
Can i put a subject to finance clause in the contract.I hear OTP contracts have to be unconditional for seller to accept.Is that true?

Would the subject to finance approval actually protect me in case the bank values the apartment lower on completion than I agreed to pay(380k) say has been valued 350k i.e can i back out without losing my deposit.

Because the apartment is so close to completion I dont see the lending rates/market changing and I have looked at older apartments selling in this area for around 370k.So I am not paying too much builder's premium I hope.

I am not even sure if this an OTP sale or a normal sale as I think by the time my financial approval comes through(asked for 14 days) the apartment might be even completed.

Haven't received the contract yet so don't know what the sunset clause says.

Please advise.
Thanks

 

I am not in this market but the general consensus is buying OTP in Brisbane at the moment is a really, really, REALLY bad idea.

They have built way too many and prices are cratering.

400k in Brissie you can still buy an old house.

 

It's a PPOR and it keeps me in the 10 km radius ..It's a lifestyle choice as I see it...

 

How many in the block?

 

14..

 

Elevator gym pool?

 

None 1.5k per annum body corporate.

 

Good that it doesn't have the elevator/pool/gym but the body corporate will be at least 750-1000 a quarter fully funded. Not a bad thing just be aware.

I wouldn't buy an apartment either but you seem to be eyes wide open (e.g. sunset etc).

Surely if it is 4 weeks from completion you can get a bank valuation - you are already in the settlement window.

 

How would the bank valuate without access to site till 4 weeks ?

 

The developer would grant a valuer access at this point or pretty soon it's almost complete (if they don't that's a warning sign that they don't think it will value up ) also be careful if any valuation firms are banned from the site (developers regularly do this to valuers who value apartments in their complex below contract prices ). Valuers can generally value a property once it's around 90% complete. To be completely honest unless you are looking at a really high end owner occ apartment in the right area (and at that purchase price I don't believe you are), I cannot recommend you buy. You are unlikely to see any capital growth in the next few years and you are buying a somewhat depreciating asset as the value in units is largely in the building not the land . You are better off renting a nice apartment and saving for a deposit on a house in the area you want .