› Forums › Finance, budgeting and loans › No money to pay for balcony repairs › Current Page
Yes, there is a big risk that when many of the owners go bust that they will just be able to walk away. I did some calculations that on a property that was bought for $550k on an 80% loan, the owner would have about $143k equity after 5 years. So if the value drops by $150k, the bank will probably not chase them but they wont have enough money to pay anything owed to strata. 95% loans are even worse.
I suspect that when we get to the point where the strata are forced to make the repairs, there will be a fire sale to investors who can finance the repairs, as most owners could not cope with even an extra $10k per year. Two bedroom units in a repaired building would go for over $600k, so if they sold for under $300k, with $200k of repairs it would be nice money.