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Buying Off-the-Plan

By Raptis on Apr 21, 2023 1:36:09 PM

Buying off-the-plan is when you sign a contract to buy a property that is either unbuilt or in the process of being built. In Australia, the term buying off-the-plan is most used when referring to apartments and townhouses, although applies equally to off-the-plan houses or ‘spec homes’.Without a physical property to inspect, buyers form their decision using floor plans and artist renderings of interiors, architectural models of the exterior, and even display suites and site tours. Information about the project, developer and builder also factors into decision-making.

Buyers are usually only required to pay a deposit to the developer when signing a contract to purchase the property, usually around 10% of the purchase price. The remainder of the price is required to be paid to the developer when the property is completed and its new owner is able to take possession, a process known as settlement. In the event you have required a loan for purchase, your lender will typically re-value the property prior to the final payment being made to the developer.

Buying off the plan brings numerous benefits to buyers:

Near-perfect condition with lower maintenance costs
Compared to older properties, new buildings are far less likely to require major repair and maintenance spending in the early years of ownership. Another positive of buying a brand-new apartment off-the-plan is the enhanced energy-efficiency, meaning less paid in utility bills in the months and years ahead.

Potential for premium rent
In the event you’re planning to purchase an apartment off-the-plan as an investment property to be rented out, there is the potential for attracting premium rental income given the new and contemporary finishes of the apartment.

‘First owner’ feel
If you are an owner-occupier of your apartment, buying off-the-plan affords the appealing excitement and enjoyment of being the first to live in a new home.

Capital growth
Should prices happen to go up in your area after you have signed a sales contract for an off-the-plan property, there is the potential that your property could increase in value by the date of completion. This lift could mean that your loan-to-value ratio (LVR) goes down. A lower LVR could help you avoid paying the added cost of Lenders Mortgage Insurance (LMI): a fee which sometimes charged to borrowers putting down a deposit of less than 20% of the total value of the property they’re buying.

Ability to tailor to your personal preferences
There is the potential to discuss making small changes and additions to your apartment with the developer prior to construction commencing, thereby avoiding the need to retrofit any existing property. This is typically only applicable to high-end properties.

More time
Buying off-the-plan also gives you a bit more time to get your finances in order, as you’ll generally only need to put down a 10% deposit to secure the contract and can use the extended construction time to save up the outstanding balance or build up your general savings. The extra cash you accumulate could also provide more of a buffer should you encounter financial difficulty. Alternatively, use it to help with moving costs or furnishings.

Government Grants
Check to see if you are eligible for government help with the costs involved in buying an off-the-plan property. For instance, you may be able to get a government grant if you’re a first home buyer. Currently, the Queensland Government provides first home buyers grants on off-the-plan purchases provided the property value is $750,000 or under, among other conditions.


Written by Raptis

Raptis is one of the Gold Coast’s most experienced and progressive developers. For more than forty years, they have developed and constructed some of the most iconic landmarks along the Coast and have substantially shaped the city’s distinctive skyline. The Raptis name is synonymous with quality and stylish living and is acknowledged for introducing new trends. Many developments have received industry recognition at both a local and national level. Importantly, the Raptis legacy is founded on family values and while father and son, Jim and Evan, spearhead the company’s growth, the overall success of the company is attributable to a dedicated team of professionals. This entire team has decades of experience in development, design, construction, sales and property management.