Two Canberra first home buyers fear they are priced out of the property market after the developer of their off-the-plan townhouse moved to cancel their sales contract.
Sister and brother Parese and Anthony Koutsoukos say they received notice from the developer, Canberra Future Property Pty Ltd, to cancel the contract for an off-the-plan townhouse in Moncrieff - more than two years after they signed it.
"If they knew that this was even possible ... they should have let us know a very long time ago. It could have helped us because prices now, they've [almost] doubled, which is unfortunate for us because now we're left out [of the market]," Ms Koutsoukos said.
It comes after the ACT last December passed an amendment bill to protect off-the-plan buyers from illegitimate contract cancellations. Developers must now seek a buyer's written consent or a Supreme Court order to exit a sale.
The Koutsoukos siblings signed the contract for their $560,000 townhouse in March 2020.
In the two years since, Canberra dwelling prices - which combines both houses and units - have risen 36.3 per cent, CoreLogic data showed.
"It's really disappointing ... and it makes me really angry to know that we tried so hard at a young age to get our foot in the door and just set us up for our future," Ms Koutsoukos said.
"It's really just set us back, instead of putting us in front."
The block on Bon Scott Crescent where their townhouse and 34 others should be standing is currently empty and overgrown, with no sign of active building works.
Speaking to The Canberra Times, Shawn Li, director of Canberra Future Property, confirmed the company planned to send rescission letters to all buyers in the coming weeks.
He said the project was no longer viable and pointed to a number of reasons why, chiefly that the contracted builder had walked away.
Mr Li said the builder abandoned the project after failing to secure insurances. Finance for the project had subsequently been withdrawn, he said.
The builder, SGB Property Developments, did not respond to questions from The Canberra Times.
Mr Li said he felt "very bad" about what the buyers were going through, but said the project had lost more than $2 million to date.
"But right now, you know, we suffered a lot of loss for the project ... the building cost is extremely high right at this stage and so the project is not viable anymore," he said.
Mr Li confirmed the company would apply to the Supreme Court to cancel contracts if buyers did not agree to the rescission letters and would then consider selling the Moncrieff site to a local developer.
Adero Law associate Andrew Chakrabarty is representing the Koutsoukos siblings and said he believed the developer's letter did not provide adequate reasoning to cancel the contract. He is requesting more evidence to justify it.
If the developer sought Supreme Court action, Mr Chakrabarty believed it would be the first attempt under new legislation introduced late last year.
In December the ACT government passed an amendment bill that requires developers to seek a buyer's consent to cancel an off-the-plan property contract under a "sunset" or "development delay" clause.
A sunset clause allows buyers or sellers to exit a sales contract if certain requirements, such as development completion, are not met by a specified date.
A developer wanting to rescind a contract must provide 28 days' written notice to the buyer, setting out the reasoning behind the proposed rescission under the clause.
If the buyer does not agree to exit the sale, the developer may seek an ACT Supreme Court order to have the contract cancelled. There is no specific timeframe in which the developer must apply to the court.
Mr Chakrabarty said the firm was also looking to find out whether the properties "are being primed for any future sale".
"We are worried that these properties will be back on the market at a much higher price, which is completely unjust and not equitable to our current purchasers," he said.
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