Why buy off the plan apartments?
Australia is home to different types of property including apartments, townhouses and houses; however, off the plan apartments are becoming a more popular residential housing type not only for owner occupiers, but also for property investors.
Off the plan apartments provide a wealth of fantastic opportunities which should not be overlooked. From good capital growth to government incentives, purchasers can also benefit from great location leading to an enviable lifestyle.
Although the Great Australian Dream once upon a time was to own a detached house on a quarter acre suburban block, surrounded by a garden, times and attitudes are shifting. Today, there is still the desire for a sense of security and home-ownership, but with house prices shifting ever upwards, this dream is slowly fading away as Australians turn to apartment living instead.
Buying off the plan apartments is one way that many Australians can still achieve home-ownership, whilst others are simply using an apartment as an investment tool to get to their end goal. If you are considering buying a property, then you may wish to consider buying apartments, rather than an established house.
So, why buy off the plan apartments over houses? Here are 18 reasons which you need to consider first.
Why buy off the plan apartments?
1. It’s new
Buying off the plan apartments mean that you are buying a property that has yet to be built yet. This means that once it is completed you will be the first people to own it and/or live in it, and let’s face it, who doesn’t love brand new? As an investor, you can charge premium rents and attract a higher quality tenant to live here.
2. High demand
Depending on the suburb, there is a high demand for new apartments, particularly within the inner-city areas. With the population of Australia rapidly rising, and some capital cities expecting to see their population double in the next two decades, there is a growing need for more housing, particularly off the plan apartments to adequately meet this demand. Over the next 15 years, Brisbane’s population is expected to double from 2.2 million in 2015 to reach 4.6 million by 2031.
3. Apartments becoming the norm
Apartment living is becoming the norm. Other global cities including New York, London and Shanghai already have a large apartment market, and Australia’s capital cities including Sydney, Melbourne and Brisbane are following this pattern. Australia is also home to a large Asian community who are used to apartment living, making this housing type more desirable.
4. Less land available
One of the reasons for an increase in the number of apartments is due to land constraints. Sydney for example is confined by the harbour and the mountains and there is less land available to build on. The only real way to continue to build is upwards and this means that our cities will become home to more new apartments pushing up demand.
5. Resort-style living
When you buy new apartments you get to benefit from a more luxurious and convenient lifestyle choice. Many new apartments today come complete with exclusive resident only facilities such as rooftop pools, gymnasium, outdoor cinema, BBQ, lounge and private dining rooms. These exclusive facilities not only attract rental tenants who want to soak up this resort-style living, but it also makes selling your property far easier and more attractive in the future.
6. Close to core amenities
New off the plan apartments also typically are well placed close to public transport, schools, shops and parks. This means that you don’t need to travel too far in search of your core amenities and ensures you live a more convenient lifestyle.
7. More affordable than houses
Apartments also tend to be more affordable than houses which can help first home buyers to enter the property market, as well as attract property investors looking for a good investment opportunity. According to the CoreLogic Home Value Index report up to 31 October 2016, the median house price for Sydney was $920,000 compared to the median unit price of $690,000. For Melbourne, the median house price sits at $665,000 compared to the median unit price of $495,000.
8. Higher depreciation benefits
One very attractive reason why you should be buying new off the plan apartments over an established house is the higher depreciation benefits available, if you are an investor. The highest claims for depreciation is in year one and you can claim on both the building as well as the interior such as fixtures and fittings, with some items able to be written off in year one. To ensure you claim all of the available depreciation, it is best to get a reputable quantity surveyor to prepare a depreciation schedule for you.
9. Stamp duty savings
Stamp duty on any property type can amount to tens of thousands of dollars. However, if you purchase a new off the plan apartment, there is the potential for huge stamp duty savings. Stamp duty is state dependent and differs on property value, so it is best to check online to see how much you could save.
10. First home owner grant
If you are a first home buyer, then it makes sense that the first home you plan to live in is an off the plan apartment. This is because you can apply for the first home owner grant which could save you $10,000 in NSW or VIC. You cannot receive the first home owner grant on an established house, it has to be brand new.
11. Capital gains
Buying off the plan apartments also means you could benefit from good amounts of capital gains, helped by a longer settlement time. If you buy when the market is low, then by the time you settle, the market could have strengthened making your apartment worth far more than what you initially paid for it. However, this all depends on where you buy and when you buy. Talk to an iBuyNew Property Consultant to learn more.
12. 10% deposit needed
You only need a 10% deposit to secure your off the plan apartment and you don’t need to apply for a loan straight away. In some cases, you might only need a 5% deposit, making buying off the plan even more attractive.
13. Longer settlement means no mortgage repayments needed
As off the plan apartments tend to have a longer settlement date of around two years on average depending on the development size, this gives you more time to save. It also means that you don’t need to pay any mortgage repayments during this time, helping you to save more instead towards moving costs, a larger deposit or emergency savings!
14. Adapting more to apartment living
With many more people renting apartments today, Australians are becoming more adaptive to apartment living, making the decision to buy apartments even easier. Not only are apartments home to singles and couples, but families with children are also living in apartments, helped by the fact that schools, retail and parks are all close by. Pet owners are also finding more opportunities to live in apartments with more pet-friendly apartments and developments available.
15. Less maintenance
Apartment living also offers less maintenance, which suits those busy city professionals who no longer have the time to clean a whole house or mow the garden. New off the plan apartments are also equipped with modern day appliances, fittings and fixtures, so the chance of things breaking is less likely compared to an older house which might suffer from damp or require new plumbing.
16. Lower power bills
As off the plan apartments are built for modern day living, you can also benefit from reduced power bills due to more energy efficient lighting and appliances. New apartments also tend to be highly functional for modern day living. They are equipped with air conditioning, modern kitchen appliances including dishwashers to make cooking and cleaning up easier.
17. Attractive for downsizers
If you are a downsizer, then apartments are particularly attractive. The apartment is new so the likelihood of appliances breaking is lower, which not only gives you peace of mind, but also saves you money from less repair work.
18. Higher rental return
Apartments tend to have a higher rental return compared to houses. Currently in Sydney houses have a rental yield of 2.8% compared to 3.8% for units. In Melbourne houses have a rental yield of 2.8% whilst units have a 4% rental yield, according to CoreLogic.
As mentioned above, there are a wealth of reasons and benefits as to why you should consider buying off the plan apartments. However, whatever property type you do choose to buy, it is important that you take the time to do your homework and the property research to ensure the property adequately suits your needs and sits comfortably within your budget.
To find out more about the latest new apartment opportunities, it’s best to get in touch with iBuyNew. We have over 150 developments to choose from across Sydney, Melbourne and Brisbane from low-rise boutiques to high-rise stunning developments complete with exclusive resident only facilities.
Talk to iBuyNew today by calling us on 1300 123 463 to find out more.