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A payout offered by the state government has reportedly been approved by the majority share of owners.
Reports of the complex plan include agreements from several banks to offer a discount on owners’ mortgages by up to 40 per cent.
Bringing the banks to the negotiating table was a move that Shelter NSW chief executive John Engeler, who acted as an intermediary between owners and the government, likened to pulling “a very big rabbit out of a very small hat”.
Mr Engeler has been involved in the negotiations that primarily involved the NSW Building Commissioner, David Chandler, acting on behalf of the government, 141 residential and commercial owners, a third-party buyer group and the banks.
While he noted that the losses incurred by many property owners would be huge, this deal allowed owner-occupiers and investors alike to find a measure of “closure” over the whole distressing saga, which has dragged on for almost five years since residents were evacuated due to cracks discovered in the basement.
The NSW government reportedly offered a support package in December 2023 that did not include any assistance for owners who had already paid off their mortgages, sending the parties back to the negotiating table. Now, it appears a deal has been struck to provide all owners with some level of compensation.
A third party will reportedly pay approximately $30 million for the apartments, averaging about $212,700 per lot. Those offers are expected to be received by the owners by the end of the week.
Having secured the discount on existing mortgages, the NSW government will then pay the rest of the loan on any debt remaining after the units of owner-occupiers have been sold.
Investors and owner-occupiers without mortgages are being offered means-tested support payments of up to $120,000, on top of the sale of their unit.
The government has gone one step further for owner-occupiers over 65 years old who do not have a mortgage but are deemed to have a “lower long-term earning capacity”. They’ll receive up to $360,000 in means-tested government support, in addition to the sale.
“It’s not perfect but it’s good enough so that people can get on with their lives,” Mr Engeler said this week in an interview with the ABC.
The proposal has apparently met the approval of more than 75 per cent of the ownership group, which is the threshold needed to move forward.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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