Developer of Olea townhouses in Gungahlin asks buyers to pay more or accept a contract cancellation

Instead all that can be seen of their future home is a hole in the ground.

From last year, buyers in the Olea development were given two options: pay an average 13.5 per cent more on the contract price for their home to be built, or accept a contract rescission, and a cash payment of $50,000, and walk away.

Buyers were told due to an increase in construction costs the developer, Dish Developments Two Pty Ltd, was no longer able to secure bank funding in order to complete the project.

Advertised as having a "modern, convenient design", the Olea development was proposed to include about 100 townhouses, available in two- and three-bedroom options.

Karen Davey is a buyer in the Olea development and said she was excited for a lifestyle change with her daughter.

Standing next to the empty site on Camilleri Way, she said she had lost confidence in the project.

"It's quite disappointing," she said.

"This was an option for the CBD lifestyle, access to the city.

"I used to drive past all the time; I don't really drive past anymore."

Adero Law senior associate Andrew Chakrabarty believes Dish Developments Two has not yet provided sufficient evidence for buyers to make a decision on the cancellation request.

"People are being asked if they want to rescind contracts ... in the absence of any material that would help them exercise the option," he said.

"They are being given what we would describe as arbitrary figures at best as to the cost of building rises."

In late 2021, legislation in the ACT around off-the-plan contract cancellations, or rescissions, was amended to better protect home buyers.

A developer must now seek a buyer's consent to exit an off-the-plan property contract if they wish to exercise a sunset or development delay clause.

A sunset clause allows a buyer or seller to exit a sales contract if certain requirements, such as registration of the units plan, are not met by a specified date.

If the buyer does not agree, the developer can seek a Supreme Court order to exit the sale and is liable for the buyer's costs in relation to the proceedings.

A developer proposing to cancel the contract must state in writing the reason for doing so.

They must also include a statement explaining the buyer can, but does not have to, accept the rescission.

Mr Chakrabarty said buyers, some who signed contracts as early as mid-2021, are also facing much higher property prices in today's market.

"The market growth is all locked in what is currently a hole in the ground and the buyers don't know why," he said.

"A lot of our clients are first home buyers and a lot of our clients do not understand the legal landscape that surrounds their decision making.

"Developers continue, in our view, to take advantage of that fact."

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Ms Davey is now weighing up her options but said she was in a fortunate position to already have secure accommodation.

"I am a single income household with a child but I currently have a townhouse somewhere else," she said.

"So the pressure that would be on the people who don't have another home and they're paying rent as well, my heart goes out to them."

Dish Developments Two Pty Ltd director, Dino Jugovac, was contacted for comment by The Canberra Times, however his lawyers advised he was unable to respond to questions prior to deadline.

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