Below you will find a profile on the Australia off the plan apartment market. You will find some property research about Australia along with a selection of off the plan Australian apartments for sale to review and compare.
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Are you looking to buy an off the plan property
? Considering an apartment off the plan that won’t be ready for 6, 12, 18 or 24 months? There is a lot to understand about this specific off the plan property market so before you decide to make the decision to buy a property, let’s see what it’s all about.
What is buying off the plan?
Buying an off the plan property
is when you decide to buy an apartment, townhouse or house that has yet to be built. It is slightly different from buying an established property as you are making the decision to buy before the development has started construction or while it is under construction. Although you cannot physically walk through the property to inspect it, you make the decision to buy based on reviewing floor plans, images and detailed information provided by the developer, architect and real estate agent.
What are the Benefits of buying off the plan?
Many people in Australia decide to buy an off the plan property due to the numerous benefits it offers. These benefits include:
While these are some of the benefits of buying an off the plan property there are some risks you need to be mindful of. These can include:
Buy now and pay for it later: When buying off the plan, you only need a 10% deposit at the time of exchange. There is no need for a mortgage until the time you settle the property sometime in the future. Buying an off the plan property therefore gives you more time to save for a larger deposit.
Greater choice: You have a greater choice of property when buying off the plan. If you are buying established property, there may only be one property for sale in a building. When you buy off the plan properties, if you work with iBuyNew that gets early access to each development then you have choice of aspect, level, floor plan, type, colour options and much more!
Cheaper prices: Once a developer achieves the presales and starts construction they often increase prices for those that look to buy on completion. Buying early gives the buyer the chance to buy at a cheaper price to those that buy on completion.
Stamp Duty Savings: Stamp Duty savings are available in some states when buying off the plan. It’s best to speak with an iBuyNew Property Consultant to find out what stamp duty savings you are eligible for.
Tax benefits: As a property investor, there are a number of reasons why you would buy property off the plan. One major reason is the large tax benefits you attain as you get to claim maximum depreciation on a new property. It is important to bear in mind though that even though saving tax is all well and good, you should not buy an off the plan property based purely on saving tax.
Due diligence: Doing your due diligence or having someone do it for you is critical to the success of your investment. At iBuyNew we conduct due diligence on all our projects to minimise any chance of something going wrong. Many developments never get off the ground or can be delayed for years.
Wrong floor plan: Designs of floor plans can vary greatly within a development. Buying the wrong floor plan can drastically change the outcome of your investment. We have seen it time and time again from clients that don’t listen to the guidance we provide. We do this every day… we know what we’re talking about!
Deposits: Never buy a property where your deposit isn’t sitting in a trust account or when a developer requests that you release the deposit to them. These are danger signs and should be avoided at all measures… especially if you think you’re getting a deal... the chances are you are going to lose your money!
Fall in property values: While one of the benefits of buying off the plan is capital growth during the construction of the property, if there is a major economic crisis, this could see your property fall in value. This will leave you with a funding gap on settlement which you will need to cover. Make sure you have a buffer and are not pushing your budget too high.
Quality of property: Expectations of what you think the quality of the project will be vs what is actually delivered. This once again comes down to knowing who you are buying from and ensuring you have done your due diligence. It also may just be that you haven’t understood exactly what you are buying… make sure you ask the questions upfront so you know what to expect on settlement.
Where should you buy off the plan property?
A very important question to ask yourself is where should you buy your off the plan property? Purchasing in the right location will be critical as to how well your property will perform and how much your property’s value will grow by. The location will also determine how well your property will be rented out if you are looking at purchasing it as an investment property. If this is the case you therefore want a property that is in close proximity to the following:
Public transport options
Shops, cafes and restaurants
Schools and hospitals
You should also factor in what future plans the local area might experience such as a new train station or shopping centre as this will determine how well your property will grow in value. If the area is expecting to get plenty of new developments then this could possibly cause an oversupply of stock with not enough demand causing high vacancy rates.
While you think buying an off the plan property is another normal real estate transaction, it’s not. You need to understand the process and more importantly you need to engage a solicitor or conveyancer that is experienced in off the plan contracts. We have seen many buyers not proceed on the purchase of an off the plan contract because their legal advice was incorrect. This has cost clients hundreds of thousands of dollars over the years. Speak to an expert… not to your friend!
If you have decided that buying an off the plan property in Australia is right for you, consider getting in touch with iBuyNew by calling 1300 123 463
to discuss the next steps. iBuyNew are specialists in New and off the plan property and can help guide you through the process answering any questions you may have along the way.
Got a specific city in mind that you want to buy an off the plan property in? Make sure you view the following: