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Sydney property developer ‘victim’ of plunging prices in exclusive suburbs

Avi Herscho's three apartment property in exclusive Bellevue Hill has been sold at auction for $4.1 million, some 40% less than its original asking price of $7 million. It is a sign that even in Sydney's top suburbs property is difficult to sell.

He has also been forced to sell his development of six luxury residential units in Rose Bay after his bank Suncorp Metway called in loans on his properties.

He was offered $7 million for the Bellevue Hill property in March but the sale fell through. He had bought it for $4.3 million in 2005.

'I am not bankrupt, but the bank wants the money and they are also under financial stress. I will have to find somewhere else to live,' Hershco said.

He has developed various luxury residential housing projects over the years, including seven apartments on the site of an old hospital each of which sold for £2 million ten years ago.

Michael Finger. Group director of Ray White Double Bay, said prices in the expensive suburbs of Sydney are being discounted by up to 15% from a year ago, and properties were taking longer to sell.

'Properties used to sell in one to three weeks, but they were now taking six to 12 weeks,' he said. Finger added that apartments priced around $3 million were the worst-affected part of the market.

Houses in Bellevue Hill that were worth $6 million were now fetching $4.8 million.

Finger said expatriates, who had planned to borrow money to purchase a home worth about $12 million, were now paying cash for a property in the $4 to $6 million range.

Finger, who has been selling real estate for 38 years, said it was harder to sell prestige property now than in the previous economic downturn in the 1990s.