Buying property off the plan has become increasingly popular in recent years. The demand has been driven by a variety of factors such as limited supply in the apartment market, the potential for capital growth in the value of the investment from the date of exchange to when it actually settles and the huge tax and depreciation benefits associated with this new property purchase. Another factor is the desire not to have to compromise on an existing property that is not quite what you are after but still holds the high price tag.
So what exactly is buying off the plan?
Essentially you are buying a promise to build a property and committing to an investment that is not yet built or where you cannot see tangible bricks and mortar. This acquisition is commonly perceived to hold elements of substantial risk, however this in fact may be quite contrary to the truth. Ishaks, your leading Sydney Conveyancing firm, have extensive experience in helping clients buy off the plan as the team specialises in these types of property acquisitions on a daily basis. As these types of property acquisitions have been growing in popularity, we have put together a list of the top 5 things to look out for when considering buying a property off the plan.
Buying off the plan checklist:
- Identify your immediate need- investment or owner occupier?
- Research comparable markets – current and previous sales within a 5-10 kilometre radius of properties of like nature or magnitude.
- Identify market indicators- These include i) Federal spending ii) Private investors iii) Population growth
- Engage a specialist Conveyancing team- ensure they are Licensed and a member of the AIC.
- Align yourself with a reputable research marketing team
- Know your borrowing capacity and your financial numbers – engage the services of a quality mortgage broker.
Over the next few months we will explore each of these points in further detail on our Recent News page on our website.
How is buying off the plan property different?
Buying off the plan is different to a registered property purchase and requires careful consideration. As well as undertaking the suggested checks above, it’s important to be aware of the ways in which buying off the plan varies to a registered property purchase. This will help to ensure you make the decision that is right for you.
Time: when you buy off the plan you will be given an estimated time for the build and completion of your property. It’s important to keep in mind that these are ESTIMATES and you will need to consider time variations and how they will affect you.
Security: when you commit to an off the plan acquisition, you will be required to pay a deposit. Your specialised Conveyancing team, will ensure your deposit is 100% protected from loss or exposure to any detriment the builder may face or be exposed to.
The development itself: you will only get to see your property when it is finished. The plans for the development will be your strongest guide to what you are purchasing, so thorough investigation and consideration of those plans are essential prior to purchase.
The advantages of buying off the plan property
While it can seem like there are a lot of considerations when making a decision to buy off the plan, it’s worth mentioning the advantages as well. Time can actually be a benefit. Firstly, the period between securing your property with a deposit and having to settle on your property while it is being built, can give you valuable time to save. Also, if the market is strong, by the time your property is built it may be worth more than your original purchase price.
Another major attraction for people buying off the plan is the property itself. Instead of having to renovate or alter an existing property, you are purchasing a brand new, never lived in property with the latest finishes and appliances, which is very attractive to some buyers.
Off the plan property can also attract Federal and State grants, exemptions and incentives which are available when buying off the plan, varying from state to state.
If you’re considering buying off the plan, engage a specialist Conveyancer
Purchasing an off the plan property requires a specialist in the field who has both experience and expertise to guide you through the process and clearly communicate all aspects of the property acquisition as identified in the contract of sale.
At Ishaks, an award winning Sydney Conveyancing team, we have many years of experience in this area and have developed a proven process for helping our clients to successfully buy off the plan property. If you would like to learn more about our trusted process or have any questions about buying off the plan, the team at Ishaks would welcome your enquiry.
Contact us today on 1300 474 257 for a complimentary appointment with one of our specialised team members.