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Discussion in 'Introductions' started by OTP Market, 29th Sep, 2016.

  1. OTP Market

    OTP Market New Member

    Joined:
    27th Sep, 2016
    Posts:
    4
    Location:
    Sydney
    Hi property lovers,

    I am the co-founder of a peer-to-peer marketplace for off-the-plan properties. We connect sellers that what to on-sell their off-the-plan with buyers.

    OTP Market - Buy and Sell Off-The-Plan Properties

    We have soft launched our platform this week, so pretty hectic and exciting times ahead. We would love to know more about the people on this forum and if we are adding any value to them with our marketplace.

    Looking forward to hearing from you.

    Best regards,
    Andre
     
  2. Jerry O

    Jerry O Well-Known Member Premium Member

    Joined:
    21st Jun, 2015
    Posts:
    360
    Location:
    NSW / Melbourne
    Welcome Andre.

    Is there more sellers than buyers at the moment?
     
  3. OTP Market

    OTP Market New Member

    Joined:
    27th Sep, 2016
    Posts:
    4
    Location:
    Sydney
    Thank you Jerry for saying hello!

    We soft launched this week, so we are now spending time to bring sellers onboard (not only from Australia, but also foreign sellers that are facing settlement problems due to the lack of financing from Aus banks and, at the same time, we are spreading the word across our network, and also reaching out to groups of property investors to join the platform.
    Feel free to register as a buyer, if you do not have a off-the-plan to on-sell, and you will be updated with new listings coming to the market.

    Best regards,
    Andre
     
  4. Mick Butterfield

    Mick Butterfield Well-Known Member

    Joined:
    15th Jan, 2016
    Posts:
    408
    Location:
    Bermagui NSW
    Hi @OTP Market welcome. There are some pretty strong opinions on OTP units or anything really on this forum. What is your research telling you about the prospects of these purchases? Will you or have you bought any OTP properties for yourself?
    Interested in hearing your take on the matter.
    Mick.
     
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  5. OTP Market

    OTP Market New Member

    Joined:
    27th Sep, 2016
    Posts:
    4
    Location:
    Sydney
    Hi Mick,

    thanks for reaching out.

    I am new to the forum so I do not know what the majority of the people here think about OTP investments. I would like to know your personal opinion as well, if you are happy to share here.

    I will refrain myself from talking about the risk and reward on technical side (buying new, choosing and customizing your own place, not getting what the developer promised, etc).

    On the macroeconomic side, without the 50% cap on foreign buyers being allowed to buy OTP, we observed a huge external demand (e.g. greater Sydney data for Aug 2015 shows that 63% of OTP was bought by foreign buyers - Knight Frank Research). Therefore, there is an argument that prices could be inflated by this external demand that in most of the cases is investing into OTP as an asset class, and not for the intrinsic purpose of what a property actually is (a mean of living for people). With the lending restrictions from the Australian banks to finance foreign buyers, we could expect a lower demand for OTP in the future and also a correction in prices if many foreign buyers start to fail to settle. Could be a good opportunity for some to enter the property market, for others to buy distressed OTP, so any property investors that are not stuck with high LVRs in his/her portfolio, could find some good deals over the next couple of years.

    Please bear in mind that this is our view, and are not providing financial advice or any kind of investment advice for anyone here on this forum.

    Best regards,
    Andre
     
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  6. Mick Butterfield

    Mick Butterfield Well-Known Member

    Joined:
    15th Jan, 2016
    Posts:
    408
    Location:
    Bermagui NSW
    Hi @OTP Market my opinion, generally in regards to OTP purchases is that they are personally not attractive as an investment. Not to say that they are not suitable for some buyers. Others can and are perfectly happy with this sort of product in their portfolio. Plenty of OO buyers as well which in a lot of ways makes more sense.

    My major concern for the sector is the end val. It is starting to rear its head now (from my research) with people not being able to settle, or having a shortfall at settlement that the bank will not meet. There have been a few threads on here with people in this very situation now.

    Macro-economically the change to Chinese lending and foreign investment policy appears to have coincided with a whole heap of new projects hitting the market or about to hit the market in the 3 eastern capitals. I am by no means an expert on this, however, it concerns me and makes me wonder who will buy them at these prices if the Chinese can't/won't.

    I am not one to try and catch a falling knife. How low can prices go if/when the prices do head south? There could be some good buying in the future, but I probably wont partake then either. But then again you may be able to persuade me.

    Mick
     
  7. OTP Market

    OTP Market New Member

    Joined:
    27th Sep, 2016
    Posts:
    4
    Location:
    Sydney
    Hi Mick,

    thank you for sharing your views on OTP and what you foresee could happen to the market in the near future.

    I agree with you on many points, and investors that bought OTP and are expecting to settle over the next couple of years could be hit by the "perfect storm" of oversupply, high valuations, and increasing settlement risk. Besides that, Australia is not immune to the increasing risk of a global market correction across many assets, as QE across US, Europe, Japan, and "Australia" created many artificial bubbles on stocks, bonds, and real estate across the globe. And after 25/26 years of continue growth, which is the record across developed countries, a major external shock with the magnitude of a GFC like-event will be more severe than the GFC itself, as Australia today has a much high debt level, and is much more vulnerable to a global shock than was back in 2008/09.

    I am not here trying to be a "prophet of the apocalypses". I just know that these risks exist, so I am trying to also think how they could affect our domestic market and implications for OTP. My view is that could be a good buying opportunity for OTP over the next couple of years. If foreign investors fail to settle, and they use a platform like OTP Market to on-sell, they still could be better off selling at a loss, than being sue by the developer and having a much higher loss and expenses to pay (e.g. legal). Some local investors with high LVRs and facing a shortfall at settlement might also prefer to on-sell at a loss than having to sell one of their properties and incur capital gain. Also, smart money never sleeps, so if property prices go down and rental yields improve few bps, some investors might re-balance their portfolios and acquire more real estate.

    There is a pumping money machine in Australia called superannuation, so no matter if markets are up or down, there is always more money coming to the market and looking for good investment options. And with SMSFs poorly diversified and sitting in low yield cash products, an improve in rental yields will make properties attractive again.

    So overall, could be good times ahead for investors with liquidity, as I am not even considering the Government creating stimulus plans, like after the GFC when became a good time to be FHB.

    "Be fearful when other are greedy and greedy when others are fearful". Warren Buffet.

    Cheers,
    Andre