Risks associated with new apartment purchases not proceeding to settlement upon completion of developments is growing amid a tightening of lending conditions and a massive pipeline of stock which is set to hit the market over the next two years, senior researchers say.

In a recent report, CoreLogic research analysts Tim Lawless and Cameron Kusher warned that ‘settlement risk,’ whereby investors who bought their apartments off the plan may not be in a position to meet their commitments upon settlement, was growing, potentially exposing developers to greater levels of holdings upon completion. Whereas…