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The benefits of buying off-the-plan property: An expert’s advice

Market Insights
1 week ago
5 minutes

From financing options to the intricate dance of quality assurance and completion, we navigate the various benefits and possible pitfalls that define the off-the-plan residence buying experience, guided by a property expert’s advice and wisdom.

In the ever-evolving real estate landscape, off-the-plan properties stand as intriguing possibilities, offering prospective homeowners a tantalising glimpse into the future of urban living.

Whether apartments or townhouses, these homes offer buyers a pathway to secure property at today’s prices while potentially reaping the rewards of future capital growth.

Taylor Dow, Director of Dow Real Estate and an expert in off-the-plan real estate shares insights into the advantages and considerations of this avenue of property purchasing and investment.

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Taylor Dow, Director of Dow Real Estate.

 

What is an off-the-plan property?

Before delving into the benefits of buying an off-the-plan property, we must first establish its meaning.

“Off-the-plan” refers to purchasing a property before its construction has been completed. Prospective buyers often purchase based solely on architectural plans, artist renderings, and information about the developer and project itself. An off-the-plan property can refer to an apartment, townhouse, or home that is yet to be habitable.

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Construction has commenced in Heartwood at Toorak, offering just 10 residences.

 

The benefits

One of the significant draws of purchasing off-the-plan is the flexibility it offers in terms of financing. This is one of the first benefits Taylor Dow specified.

“Buying off-the-plan is a great way to secure the property at today’s price and save up for either the remaining amount of the deposit or the requirements of your lender, not to mention benefit from the uplift of potential capital growth,” said Taylor.

Buyers often can secure their desired property with a minimal deposit, sometimes as low as 5%. And when you buy good real estate, it will always grow in value.

“Location, location, location,” Taylor emphasised.

“Location, in my opinion, is the best rule to follow when looking for potential appreciation.”

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You can enjoy city views from Monument in Armadale’s OTP residences.

 

Potential risks

Yet, much like anything else, potential risks come with benefits.

“Risks when buying off the plan can be limited when buying from a reputable development team,” said Taylor.

“To limit any unexpected risk, ensure you have researched all parties involved in the project and have your contract documented to match your expectations.”

Taylor also highlighted the importance of double-checking the size of your property, advising that you ensure the size of the home is what you have purchased so there isn’t a risk come settlement time.

“With that, prior to the development’s completion, you will be instructed to get your financial approvals and the bank will advise you on your requirements to settle,” he said.

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Live on iconic Smith Street with Fitzroy Fitzroy’s OTP terrace homes and apartments.

 

What to look for

When looking for a solid off-the-plan property, Taylor again brought up the importance of location and project team.

“Typically, if the project is in a great location, its performance will match that of an established property,” he said.

“Each property is different in its own right, so it is important that you understand your orientation, size, and configuration when comparing to the established market.

“Ensure the team behind the project is fantastic, specifically the builder and development team.”

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Only 3 unique penthouse-style OTP residences at 94 River Street, South Yarra.

 

Before signing the dotted line… 

You must ensure you’ve covered all the details.

“These days, off-the-plan contracts are very detailed and itemise all the inclusions,” Taylor assured.

“Before buying off-the-plan, it is important to ensure you understand the specifications and inclusions; this is as simple as a one-page document that outlines what you will be getting.

“Ensure you know what you want and are clear on the configuration, size, layout, aspect, and type of building you wish to buy in.”

With all this information that you will be presented with during the buying process, Taylor still emphasises the importance of doing your own research. This can include researching the development team, potential property value as influenced by the project’s location, design preferences, contracts, and more.

When the development is complete, remember that you are able to sell or lease the property at any time once it has settled.

“However, you typically can not sell the property prior to settlement unless agreed prior,” Taylor reminded.

“Once the property settles, it is no longer ‘off the plan’ and is considered the same as any other property.”

Even so, you can always ask questions.

“Questions are free, so make sure you ask lots of questions if you are unsure, and the development team will be able to answer for you,” Taylor reassures.

For more on off-the-plan properties, real estate news, and lifestyle, click here.

Header image of Monument in Armadale.