Developers slash prices, lower deposits to sell apartments in Brisbane

In an effort to sell off enough apartments to allow construction to go ahead, one Brisbane developer has slashed prices by 12 per cent, and halved the upfront costs on two-bedroom units in a Cannon Hill development.

The third tower of Lime Living is nearing its scheduled construction date, without enough apartments sold to commence.

Project marketers Colliers International have taken the opportunity to target first-home buyers, offering a 5 per cent upfront deposit for those looking to take their first step into the property market.

Associate director for residential Rachel Hutson said it wasn’t common for a developer to be willing to slash prices and take a lower deposit on an off-the-plan apartment.

“It’s very rare,” she said. “The only other projects that have offered close to 12 per cent is where the original buyers have defaulted.”

Only four apartments are available in Lime Living at the reduced prices, $395,000 down from $450,000 and $399,000 down from $455,000.

The scheme requires buyers to pay an additional 2.5 per cent at a “certain point” in the construction timeline, and any shortfall in their loan deposit with the bank. However, Ms Hutson said it was possible to find a home loan offering a 5 per cent deposit option.

Colliers was also offering the lowered deposit scheme for the Park Central One development in Woolloongabba.

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Lowered deposit schemes provided a greater chance of buyers walking away from their deposits when it came time to settle, but Ms Hutson said that risk was mostly mitigated because owner-occupiers were far less likely to walk away from a deposit.

“Obviously it means the buyer hasn’t got as much cash down, it means there’s less money they’d have to walk away from,” she said. “[But] 5 per cent is a lot of money for a young person who had to save for a couple of years.”

Settlement risk and lowered investor appetite was another reason why Colliers wanted to target owner-occupiers rather than investors.

“There are investors who have bought in there,” Ms Hutson said. “It’s more that we’ve identified that there are first home buyers that are interested.”

Red & Co’s lending expert Jayden Vecchio said offers like Colliers’ were tempting, but buyers needed to beware of deals.

“There was a developer on the southside that was giving away a Yaris with each purchase off-the-plan or there might be a furniture package, I’m just saying that that shouldn’t be the reason why you buy or spend a large amount of money,” he said.

Mr Vecchio said it was better for buyers to only buy something they already wanted to buy, and then take the bonus, if there was one, as an added extra.

“You don’t want to rush into it, you don’t want to cut corners on it,” he said. “It could be worth getting an independent report or an evaluation or external advice.”