So investors are still buying. A disappointing absence of the word savvy though. Nevermind.
So how does this work? If the developer has already built the house and owns it. Why is he taking out a mortgage to buy it from himself and then rent it out? Is it a case of another subsidiary of the developer buying the house from the building subsidiary, so that the building arm can get in cash and pay off the bank, at the same time loaning money from the bank through another subsidiary to buy the place.
And the second question, if developers are renting these places out, are they still classified as new when they are eventually sold to someone other than the developer?
Which kind of leads to a third question, if the developers financed the development through loans from a bank and have now mortgaged the development to pay back the original loans are they just borrowing long to pay short?
I wonder who is going the valuations for those mortgages?
I wonder if the developments being mortgaged on an individual house basis are being used as collateral for the original loan for constructing them?