The benefits of buying off the plan are:
- You pay a lower price because the developer offers discounts to achieve a certain amount of pre sales
- You lock in at the initial and lowest price. This is a fixed price which includes all the finishes and fittings as outlined in the contract
- You normally only pay a 10% deposit with the remainder not due for 6-24 months
- You can customise the interior to suit your requirements and taste
- Many buyers use deposit bonds* if they do not have access to the deposit straight away
Normally when a development is released a pattern emerges, i.e. penthouses, corner units, best views and ground floor with private gardens tend to sell first. As soon as the main structure of the development starts to take shape, or a display unit is constructed, prices normally increase substantially as prospective purchasers can see much more easily what the finished development and individual properties will look like. Purchasers often buy off the plan and then sell at settlement (ie when the building is completed) to make some money quickly. In most cases, by the time the development has been built, there is a substantial capital increase and it is worth more than the original, off the plan price. Buying off the plan is of greatest benefit when it is a medium to long term investment.
We recommend that any future investor seek the professional advice of a suitably qualified accountant in relation to taxation and depreciation benefits prior to purchase.
* Deposit bonds act like an insurance bond in the case of purchasing property if a potential buyer does not have access to the usual 10% deposit that is required. Deposit bonds can be easily organised through a financial adviser or institution. Deposit bonds incur a minimal fee but essentially they enable a buyer to secure a property immediately rather than in 6 months time when the price of the property may increase. The purchaser needs to provide evidence of income, assets and liabilities.