When we think of the term “off the plan” we normally associate this type of property purchase with only properties that have yet to start construction. Buyers rely heavily on floor plans, price lists, schedule of finishes and brochures to make the decision to buy as they are unable to walk around the property itself. However, “buying off the plan” is also associated with properties that have started construction as well as properties that are newly built.
Of course, the earlier you buy property off the plan, the more affordable it is, the greater chance you have of choosing the best possible floor plans as well as the ability to choose your preferred colour scheme, usually from the options light or dark.
When you buy before construction, as well as making the most of the best floor plans, greater availability and best affordability, you might also be able to tap into some developer incentives and get more money for your buck such as free blinds, stamp duty savings and upgraded appliances. The developer does this, not because the development is dodgy, but usually because the developer needs to secure finance from the lender in order to proceed, but can only receive finance once a certain amount of properties have already been sold (reach their pre-sales target).
It therefore pays to get in early. Buying earlier also means that you can enjoy a longer settlement time and typically see your property grow in value by the time settlement arrives, which can be a year or more away. This is great news for both investors and home buyers as you can wisely use this time to build up your savings again and put some money away to aid you if a larger deposit is required or additional costs arise.
Although the best time to purchase property off the plan is at pre-launch, there is still ample opportunities to buy once construction has started. Off the plan developments, typically larger ones take a year or more to complete, and there are still many good properties to buy during the construction phase, depending on how popular the development is.
Depending on how far construction has commenced, purchasers might still benefit from developer incentives to get deals across the line, although property prices are likely to have increased since construction has begun. Properties are also likely to increase in price as construction draws closer to an end and less properties become available.
You also need to bear in mind that many of the best properties are likely to have been snapped up already, but with many properties having the same floor plan multiple times in an apartment building, you might still be able to secure your preferred floor plan, but on a different level than you intended.
You also need to bear in mind stamp duty. Purchasing a property before construction means that you only have to pay stamp duty on the land component, whilst those who purchase house and land during construction for instance will have to pay stamp duty on both the land and house component, costing you more.
The last chance you have to purchase off the plan properties is when they are newly completed. Sometimes a developer will keep a few properties back in order to sell them at today’s market price, so these properties will be much more expensive than at pre-launch. However, you are still buying a property that is brand new which has never been lived in and you generally only require a 10 per cent deposit, although you will have to start paying a mortgage.
Buying at completion is good for anyone who needs to move into the property straight away such as a home buyer and you can still benefit from government incentives such as the First Home Owner Grant as you are buying new property. It’s best to check with your state government that you are buying in to determine how much this is, as the amount changes per state. You should also double check the eligibility requirements whilst you’re at it.
Buyers of new off the plan property can also benefit from stamp duty savings, which again is dependent on where you buy and your property value.
It’s not just apartments that you can buy off the plan, although this is the main property type that spring to people’s minds. You can also purchase townhouses and house and land packages too if you don’t fancy buying into a high-rise complex close to the city centre. You can also find some affordable family-sized properties in house and land estates, which usually comprise three, four or five bedrooms. They are situated close to core amenities such as schools, retail and dining and good transport connections, ensuring that you can still live a high quality lifestyle with everything you require close by.
Off the plan apartment developments can be anything from small boutique developments, mid-rise as well as high-rise apartment towers, complete with rooftop terrace, swimming pools, sauna, outdoor cinema and private dining rooms. Of course, the more facilities that an off the plan development has, the higher the strata will be.
So, when is the best time to buy property off the plan? Although, buying as early as possible into a development is the best and most affordable option, it really comes down to your circumstances. As a home buyer, you might require a property sooner to move into so a property already under construction might be the option for you; however, an investor should be looking to buy in the pre-launch phase of the build for the best capital growth and possible incentives.
At iBuyNew, we specialise in selling apartments, townhouses and house and land packages off the plan across Australia and have over 200 developments to choose from at various phases of yet to start construction, under construction and newly built.
To find out more about our available off the plan properties and what property type best suits you, it’s worthwhile speaking to one of our expert and friendly Property Consultants for more information. Get in touch with the team by calling us on 1300 123 463.