I don’t know how the rest of you get to work….maybe you train it, bus it, if you’re an Australian politician you may even take a plane or helicopter. On a sunny, Autumn day I’m inclined to drive down the Esplanade in Mornington and take in the breathtaking view of Fisherman Bay; on the odd occasion that I take my eyes away from the sun and sea I’ve realised that, more than ever, we are having executive-style waterfront apartments being built. We’re talking state-of-the-art, impressive apartments with uninterrupted views of Port Phillip Bay. So, what is entailed in buying a property off-the-plan?
It’s difficult to imagine a project when you’re only going by blueprints and/or artist’s impressions. Some developers may have a display suite for you to gauge the level of quality and size however due to different configurations this acts as more of a guide to the finished apartment rather than an accurate layout. What you need to know:
• How much will it cost and will it be worth it?
One of the advantages of buying off the plan is you are purchasing at the current market price even though the project may not be finished for a couple of years. This can of course be very beneficial if the market experiences growth; alternatively, as we cannot predict the future it’s important to also consider you may be effected if the market drops.
• Often developers offer lower prices before construction starts to secure the project, so you might save some money by getting in early.
• Buying off the plan can save you on stamp duty in some states, this could save you thousands.
• If you are buying for investment purposes there may be some tax advantages such as claiming depreciation for fixtures and fittings.
• With any newly built property in Australia there is a seven year builders guarantee.
• You will most likely be asked for a 10% deposit when you sign the contract and the balance would be due at completion/settlement.
• Have a solicitor or conveyancer check the terms of the agreement to ensure you are getting what you want!
• Find out how much the levies will cost. Get involved in the Owners Corporation so you are first to know of any changes; attend meeting and ask questions.
• Are you getting the fixtures and fittings you want?
Generally, you will have a range of fixtures and fittings to choose from so confirm these are part of the purchase price. You will need to consider for example floor coverings, painting, light fittings, kitchen appliances to name a few.
• If you are considering finance you will need to evaluate your financial position to prepare for settlement; the interest rate at the time and pre-approval conditions may have changed.
Don’t be afraid to ask questions, do your homework, research the market, research the developer and consult professionals. Buying off-the-plan may not be for everyone, but if you have found an area with strong capital growth and a property with exceptional features it’s worth considering. Meanwhile, I’ll continue to drive by the Esplanade in Mornington and wow at the view that off the plan buyers will call home.
Please contact us in regards to any questions you may have; our financial advisers and mortgage brokers are ready for your calls (03) 5976 8426.