More off the plan houses and apartments are on the market today – but are they truly a good investment? We lay down the facts.
The first off the plan properties to be released are usually offered at cheaper prices than the established ones, as the developers need cash fast to begin the project. This is great if you’re looking for a more competitive price and can afford to wait.
You can also use the time needed to finish building the property to reorganise your finances and moving out plans.
In some states and territories, you can also claim stamp duty concessions for the purchase of off the plan properties, as local governments are looking to support development of new residential buildings. There are also some tax deductions for investors.
The sooner you get involved in an off the plan transaction, the more likely it is that you can customise your property, such as the location, the floor plans and the finishes.
Even with the most meticulous plan, the resulting product may be different from what you expected. The finish date can also be delayed, meaning that you may need to reschedule and change your plans.
Off the plan properties may not be the most profitable investment, too. According to BIS Oxford Economics, most off the plan buyers who resell in a few years are either facing loss or getting less capital gain than those who buy established properties.
Research the developer to evaluate their credibility and trustworthiness. Visit the site in person to see how living in the area will be like.
Always read the fine print and double check the contract. Things to look out for include the cooling off period, deposit, estimated completion time, defects, deposit and insurance.