Buying off the plan much more than it used to be

Buying property off the plan has never been as popular as it is now, with purchasers of all ages responding to much more sophisticated ways of marketing, selling and delivering the product.

“Advances in technology and the information we can now provide on projects give people much more clarity around what they’re buying,” says Peter Chittenden, the managing director of residential at Colliers International.

“With computer-generated images, aerials and fully fitted display suites, we can now create one-stop shops to help people understand.”

Fears over possible defects might once have deterred buyers but now, with much more information available, it’s easier to check the records of developers, builders, banks and agents. “They all now have their brands, so customers know much more about who they’re dealing with,” he says.

The increase in off-the-plan sales has been driven by demand, says Nigel Edgar, NSW general manager of Australand’s residential division.

“It’s a secure way to buy a new apartment in what’s a popular market segment with limited supply,” he says. “And our research has shown us that people prefer to buy from reputable developers.”

Five reasons to buy off the plan

1. If you think that new car smell is heavenly, just wait until you breathe in the air of your new, never-before-lived-in home, and admire the gleam of the new appliances, the virgin walls and the pristine floorboards, carpets or tiles.

2. Provided you buy well, it can be cheaper than buying an existing property, as well as savings on stamp duty and grants for buying new. In Melbourne, a payment of up to $10,000 is available for eligible first home buyers as long as the price of the property or construction of the home does not exceed $750,000. There is also a 40 per cent reduction on stamp duty for new homes worth $600,000 or less. In Sydney, first home buyers are eligible for a $15,000 grant if buying a newly built place for less than $650,000. They are also exempt from stamp duty if the value of the new home is less than  $550,000 (or land valued less than $350,000), or a concession on stamp study if the value is between $550,000 and $650,000.

3. The design of new apartments and townhouses has improved hugely since the days of cramped, dark interiors with wasted corridor space, little storage and no balconies.

4. If the market is rising, the value of your apartment might have soared by the time it is finished and you have to pay for it – after saving for the two years of construction – and move in.

5. You get the latest in technology and finishes which may keep strata levies down, or great resort-style facilities which may mean you never have to leave home for entertainment again!

Five things to look out for

1. Check the developer. Look at what buildings they’ve developed before. Make sure there have been no problems, and do the same due diligence with the builder, architect and financier.

2. Look at the local plans and phone the council to make sure any open space is not zoned for another development.

3. Make sure the estimated levies are realistic to pay for the services and facilities promised. You don’t want the levies to go up when it is discovered the bills are higher than predicted.

4. Avoid one-stop-shop situations where the developer, strata manager and building manager are basically the same company. When conflicts arise, you need someone on your side.

5. Read the proposed bylaws to ensure they suit your lifestyle. There is no comeback, for example, if the real estate agent told you it was pet friendly but the bylaws ban animals.

Buying property off the plan has never been as popular as it is now, with purchasers of all ages responding to much more sophisticated ways of marketing, selling and delivering the product.

Story:  Sue Wellings      Source:  www.domain.com.au