There should be two upsides to buying an off-the-plan – competitive pricing compared with similar properties already built and the fact your property will be brand new.
These benefits don’t come without a challenge: you must commit to a purchase based on a scale model, artist’s impression and floor plan.
As a physical inspection is impossible, you’ll need to use your imagination to picture whether the property is right for you.
The transaction is different, too. Typically, you’ll pay a 10% deposit to reserve your purchase and then wait for construction to finish. You are most likely to need cold, hard cash for your down payment because lenders rarely issue a mortgage until construction is completed.
Here are a few tips:
- Set Your Budget – Before you do anything, find out how much you can borrow as this determines how much you can spend on your new home.
- Your strategy – Focus on the location and quality of apartments you can afford. Criteria to consider:
- Location and views
- Large or small development
- Ground floor or higher level with balcony
- Favoured floor plan, such as a large living area
- Number of bedrooms and bathrooms, including ensuites
- Available facilities, such as a pool, gym and parking
- Window shop – Visit the sales offices of developments either being built or those where construction has not started. Ask whether it’s possible to do a virtual inspection or see any 3D renders.
- Deeper research – Once you’ve found a development, conduct due diligence on the developer, builder and architect. Find out what else they’ve worked on and reassure yourself of the quality of their projects.
- Check DA approval – Don’t assume anything. Make sure a project has Development Application approval. Be aware that some prospective projects, even those with DA approval, may never go ahead.
- Investment potential – Find out if there are similar projects within a 5km radius as a local area flooded with new units will affect your property’s value in the short to medium term. Repercussions may include a hesitancy by your lender to issue a mortgage due to this oversupply so it’s best to be prepared.
- This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.