Along with the new laws that protect off the plan buyers, there are many benefits to buying off the plan properties. Benefits include stamp duty savings and the potential for more significant capital gains. More and more property investors are leaning towards this investment strategy for a variety of reasons under the right circumstances. If you’re contemplating going the off the plan route, you may want to brush up on these FAQs as commonly asked by first time off the plan property buyers, so you know what to expect.
Displays are a good measure of the quality of your property’s finishes. Off-the-plan buyers will be inclined to ask whether the display of the property will be identical to what they will be purchasing. This depends on your developer, so it’s best to ask your sales consultant how your property will differ from the display in terms of dimensions, furniture (whether or not included), and layout.
Off-the-plan properties most likely require property investors to pay a 10% deposit when signing the contract with the remaining balance due when the property is completed. The deposit can be paid in either cash, bank guarantee or through a deposit bond. Your deposit will be kept in a solicitor’s trust account until the project is completed of the sunset date expires.
Construction times largely depend on the developer, the size of the building, and other factors. Projects that are more extensive generally take more time to build.
The sunset date is the date wherein you are allowed to terminate the contract in certain events (e.g. plan not being registered by a specific date). So if for any reason, the development is not completed, you have the power to terminate the contract 3 and 1/2 years from the time you entered the agreement.
Before signing the contract, the developer will hand out disclosure documents, which states the current intention of the property. The development or property you are buying may likely have some changes due to varying reasons. Under the new laws that protect off the plan buyers, developers are now required to notify buyers of any changes made during the development. You, as a buyer will be able to terminate the contract or claim compensation when you are materially impacted to changes made from what was disclosed.
Off the plan properties, take at least a year or more to complete. As such, market conditions can change, and interest rates could rise. Under the contract, you are obligated to settle. It’s essential to keep in mind that property cycles go up and down and that your investment should be looked at from a broader perspective and its long term benefits.
Settlement occurs 14 days after the registration of the plan. When the development is complete, the developer has to obtain certifications and approvals. Once done, the plans will then go to the Council and Titles office. Once they register the new plan, the developer will then call for settlement.
A levy is a fee that the owner of an apartment unit must pay to the Owners Corporation for the management and upkeep of the common property. A development with no facilities will have lower strata fees compared to high-rise developments with gyms and swimming pools that requires maintenance and upkeep.
Buying off the plan is a very safe investment type and one of the most popular investment strategies in Australia. Through an amount of research and ensuring it is within your financial capacity, buying off the plan will help you obtain the most from your investment property in the long run.
Buying off the plan is advantageous for several reasons - they’re more affordable compared to buying an established property; you save on tax and you benefit from capital growth when property market grows its value.
A9 Property is a team of property specialists helping first time homebuyers and property investors on their journey into the real estate market. Our weekly real estate blog touches on industry trends, market shifts and investment strategy, providing you with valuable insight on your property purchase journey. We are experts who specialise in off the plan properties – a popular investment strategy in Brisbane and Australia. Check out our carefully selected portfolio of off-market properties for sale or contact us for an obligation-free chat to discuss the best strategy to start building your portfolio.