Buying a new or off-the-plan property can be a daunting prospect for first-home buyers and investors alike. However, there are significant benefits to buying a property off-the-plan.
When buying an off-the-plan property, you could be eligible for some of the Government incentives such as the First Home Owner Grant (FHOG) and Stamp Duty concessions. The incentives differ per state but could end up saving you thousands of dollars on your purchase.
These incentives are often put in place to help first-home buyers get their foot on the property ladder.
Choose Your Own Home
Buying off-the-plan can often give you more choices on location, design and finishes of your home.
Generally, you will have the flexibility to not only choose your property and its location in the development, but you can also customise elements of your home design such as floor plans and finishes. The earlier in the development process you purchase, the more input you should have in your home design.
More Time To Save
When buying real estate, conventionally you will need to pay a 20% deposit of the full purchase price, compared to a 5-10% deposit for an off-the-plan property.
Off-the-plan differs as typically a property can take up to 1-2 years to construct, giving you extra time to save for a deposit, and you don't have to worry about paying a mortgage during this time. This only starts once construction is completed. Also, buying off-the-plan can be more affordable compared with established properties.
Potential Capital Gains
Buying off-the-plan allows you to buy at today's price, where you lock in the purchase price commonly 1-2 years before construction is completed.
House and unit prices surged by 22.1% in 2021, with some areas far exceeding that growth. This often means you will own a property that's worth more than you paid for it by the time you move in.
Reduced Insurance and Maintenance Costs
Purchasing off-the-plan property will commonly come with the benefit of the latest in home security technology.
Modern safety features often come standard like doorbell intercoms, concierge, keycard access, off-street car parking and monitored security cameras. Additionally, buildings with elevator access provide an extra layer of safety. This all adds up to making your property more secure, decreasing the cost of insurance.
Also, newer homes will require less ongoing maintenance and fewer repairs compared to established properties.
Builders of new properties in Australia are required to take out home warranty insurance, which protects you in the event of a major building defect, giving you peace of mind.