Statistics from the US National Association of Realtors confirm that Chinese investors purchased $22bn worth of residential real estate in the 12 months to March, a 72% increase from the year before.
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Chinese Investors spending up big in NZ
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Asian investors in New Zealand project lose legal bid
109 Singaporeans, Malaysians stung for $33m on top of failing to recover deposits totalling $9m
A group of 109 mostly Singaporean and Malaysian investors who bought apartments in New Zealand lost a total of NZ$10 million (S$9.2 million) in deposits when the developer went bankrupt in the wake of the global financial crisis.
Not only did the investors fail in a legal bid to recover their deposits, they have now been stung for another NZ$36 million (S$33 million) in a counter-claim by the firm run by the receivers, to recover losses during the global financial crisis in Queenstown. In February, the High Court of New Zealand ruled that Kawarau Village Holdings was entitled to deposits and the NZ$36 million from the group of Asian investors.
This group - none New Zealanders - invested in the failed NZ$2 billion (S$1.8 billion) Kawarau Falls development in the South Island between 2006 and 2009.
Court documents said the investors bought off the plan units in Lakeside West and Kingston West, to be constructed on the shores of Lake Wakatipu, near Queenstown.
The buildings were to be Stage 1 of a three-stage integrated lakeside resort development known as Kawarau Falls Station, set to become a world-class resort with 13 hotels and serviced apartment complexes.
Conceived in 2005, the buildings were part of Auckland developer Nigel McKenna's ambitious project during a buoyant period for property development there. The units were marketed for sale in Asia by Austpac Investment Consultancy.
Singaporean Alex and wife Lisa went to Austpac's Collyer Quay sales launch in 2006. Under two weeks later they opted to buy a one-bedder Kingston West serviced unit for NZ$369,000. The pair, who asked to be known by only their first names, told The Straits Times they paid NZ$70,000 in deposits by 2007.
Housewife Lisa, 48, said: "We were promised a guaranteed rental yield of 6 per cent a year after completion. And we were told that we would be able to stay in the apartment for two to three days a year."
Businessman Alex, 50, added: "We wanted to own a second property but we could not afford one here. So we looked for one overseas... we thought the worst-case scenario would be to lose our deposits."
Another Singaporean who declined to be named said he travelled to Queenstown before sinking about NZ$150,000 in deposit for a two-bedroom apartment at Lakeside View, costing over NZ$1 million. He faces about NZ$700,000 in damages, and says he has already spent $30,000 in legal fees.
In 2009, the original developer Peninsula Road was bankrupted by the global financial crisis and placed in receivership in 2010.
Some time in 2011, the group of investors were served settlement notices by the receivers for their purchases - to pay up the full amount. But none of them settled, alleging that Kawarau Village has breached the contract they had signed.
In March 2012, Kawarau Village proceeded to cancel all of the sales and purchase agreements and forfeited the deposits. The group of investors jointly sought a court order for the return of their deposits. Last March, Kawarau Village started legal proceedings against Mr David Yuen who runs Austpac over a guarantee to buy the units if buyers defaulted.
Lawyer Phil Creagh of Anderson Creagh Lai, representing over 30 investors, told The Straits Times in an e-mail that fewer than 10 of them have come to a settlement with Kawarau Village. The rest have proceeded with a joint appeal against the judgment to be heard next August.
Source: Strait Times
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another
"off the plan" nightmare
obviously the "contracts" provided by the sellers of these things
are written by the developers lawyers to protect them
only if your lawyers can go over these things and make amendments to protect your deposit + interests
will these agreements protect you
but of course the sellers of these developments simply find it much easier to find someone else
than have many different contracts protecting many different interests
off-the-plan can work well if there are no, or only small, hiccups
but if there are large, unexpected events or costs
the developers lawyers haven't done their work properly
if anyone but the depositors - purchasers
lose their shirts
......
currently the 125 year leasehold apartments complex on the tank farm development in auckland
is under-way
BUT it turns out 100 years of industrial use have rendered the soil currently unfit for housing
so 1 meter? of topsoil has to be skimmed and replaced
mobil? who leased it 50? years ago, (with a clean bill of health) budgeted a certain amount for the cleanup for their limited spillage in that time
but more stringent testing? showed lead? and all sorts of other nasties from the war? years and earlier
so lawyers for; council, developers, current users and previous usres
battled in the high court? to decide who pays for the clean-up
this is going to be a massive delay
there are going to be huge costs
if you had put down a deposit for an apartment there and scheduled payments to completion
depending on the contract off-the-plan buyers could get hugely hurt
http://www.nzherald.co.nz/business/n...ectid=11502603
EVEN if the contract looked rock-solid
there will be some act-of-god? clause stopping the developers from getting too hurt from something outside of their control
Last edited by eri; 06-12-2015, 10:09 AM.have you defeated them?
your demons
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The problem Eri is that Asians, especially Singapore and Malaysians buy off plans all the time. it is normal way to buy. So they have no idea that so many NZ off plan developments never get finished because we are basically poor compared with their home countries. They will never think to check things like contract details. All they want to see is a rental guarantee and they will buy. You won;t change that. That's why so many debs send marketing people to Asia to sell because it's easy.
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Originally posted by eri View Post
if you had put down a deposit for an apartment there and scheduled payments to completion
depending on the contract off-the-plan buyers could get hugely hurt
Ah Grasshopers,
Was it not that great 20th century muse John Lennon who said:
“Strife is what happens to you while you are busy buying property off the plans”
sorry John
HermanZ
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Originally posted by Damap View PostThe problem Eri is that Asians, especially Singapore and Malaysians buy off plans all the time. it is normal way to buy. So they have no idea that so many NZ off plan developments never get finished because we are basically poor compared with their home countries. They will never think to check things like contract details. All they want to see is a rental guarantee and they will buy. You won;t change that. That's why so many debs send marketing people to Asia to sell because it's easy.
These Asian investors learned their lesson. The news was widely covered in local media, and the local real estate communities were talking about it. NZ will have hard time luring Asian investors in future.Last edited by chrisgoh; 06-12-2015, 04:24 PM.
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Where is our government to step in and protect the investors? Oh that's right, it's NZ, not China
Seriously, I would NEVER consider buying off plan. Just wait for the next bust in the cycle and buy them for half price.
A while back I bought an apartment for the price the original purchaser had paid 26 years earlier... poor fella, but this is just the way it works.Squadly dinky do!
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Originally posted by Damap View PostOh they will Chris, they are there selling off plans right now :-). It's such a big part of your culture. Seen as a low risk way to make money.
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Interesting Australian program on Chinese investment in Australia. http://www.abc.net.au/4corners/stori...12/4327525.htm
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China now the No.1 foreign buyer of U.S. properties
http://therealdeal.com/blog/2015/12/06/china-now-the-no-1-foreign-buyer-of-u-s-properties/
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Meanwhile, the stockmarket in China is heading south with economic data and equity markets there giving shareholders plenty to worry about.
One wonders what impact this will have on those hoping to cash up their shares to buy property in New Zealand.
They are facing a triple whammy of lower share values, tougher monetary controls, and red tape in New Zealand.
http://www.nzherald.co.nz/property/n...ectid=11573227have you defeated them?
your demons
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