Top Tips for Off-the-plan Apartment Buyers
An off-the-plan purchase means buying a property before it has been fully constructed, or in some cases, even commenced. While buying a home you haven’t set foot in yet can feel daunting, it’s a popular strategy among apartment buyers in Victoria that is certainly worth considering.
This article looks at the top tips for making sure you get the best out of your off-the-plan purchase.
1. 10% deposit with plenty of time to plan: Typically, a 10% deposit is required when buying off the plan. This upfront commitment secures your future property at today’s prices, with often 18-36 months of build time before you need to consider settlement. It’s wise to use this time to plan the sale of your existing home or finish up a lease, as well as build up your cash reserves before settlement.
2. Explore available concessions and exemptions: Victoria offers a range of various stamp duty concessions and exemptions for off-the-plan purchases. While these may offer significant reductions in the amount of duty payable at settlement, it is important that you seek independent advice on the eligibility of any potential concessions since it is invariably subject to the unique circumstances of each purchaser and the property purchased. For more information, review the available information at the State Revenue Office Website or consult your conveyancer.
3. Find a trusted conveyancer: Enlisting a conveyancer is key. They navigate the legal intricacies, ensuring your contract protects your interests, particularly with clauses specific to off-the-plan purchases, like sunset clauses. They’ll also guide you through the settlement process to ensure the exchange is as smooth as possible.
4. Be informed about your finances: It's crucial to consider that if your financial circumstances could alter between signing the contract and the settlement date, you may face challenges due to the binding nature of the unconditional contract. Remember, pre-approvals have an expiration date.
5. Understand owner’s corporation obligations and benefits: When buying off-the-plan, understanding your role in the owner's corporation is essential. This body manages common areas like lobbies, gardens, resident lounges, and gyms, requiring your financial contribution for upkeep. The benefits include well-maintained spaces and potentially enhanced property value, with maintenance through collective contributions.
6. Choose a reputable developer: Opting for a developer with a strong track record is paramount. Do they have a reputation for quality, reliability, and adherence to timelines? Is their word-of-mouth positive? And what about repeat purchasers? It’s important to do your research, looking at past projects to gauge a developer’s standard of work and the ongoing capital appreciation of their buildings in Australia.
7. Personalise your space: Depending on when you decide to buy in the construction cycle, it may be possible to customise some of the elements of your new home, from colour schemes to flooring materials. It’s important to consider that changing the floorplan or functional design usually isn’t possible and that even minor variations can come at additional cost or even increase the time it takes to complete your apartment.
8. Understanding the timeline: Reputable developers have clear policies in place to clearly communicate construction timelines and expectations if delays occurs to ensure transparency and trust.
9. Long-term considerations: Consider the future resale value and rental potential.
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