Buying a property off-the-plan involves signing a contract of sale for a property with a developer that either has not yet obtained final approval for the subdivision of the land or in the case of a building, prior to its construction or completion. This could include purchasing vacant land, house & land packages or strata properties (such as units, townhouses or apartments).
Each off the plan purchase has different benefits, some of the more common advantages can include:
– The ability to modify the colour scheme, building materials or layout.
– The opportunity to partner with the developer to get the project off the ground for which incentives are offered (this could include price discounts, furniture packages or similar).
– Having the ability to secure your most preferred or valuable property in the development prior to its completion.
– Provides additional time, in which the purchaser can prepare to move, organise their finances or sell their existing home.
– If the market has experienced growth from the time a contact of sale is entered into, then the property purchased off-the-plan may also rise in value by the time the property is ready to settle.
There’s often a lot of value to be gained from off-the-plan purchases, however there are things to be cautious of, such as:
– The developer may not be able to proceed with the project if they are unable to secure sufficient investment funding or final subdivision approval.
– The money used to secure the property (termed the deposit) can be tied up for a considerable amount of time. If possible, request that the money is held in an interest bearing account so that it is securing and earning interest throughout the construction phase.
– There’s nothing to inspect as an off-the-plan sale occurs prior to construction and therefore expectations have to be derived from the plans and project’s marketing material.