Many Australians are cautious of buying apartments off the plan. At face value they seem complicated and hard to understand. However, this is quite the opposite. If you know what you’re doing an Apartment can really present so many benefits to you.
We won’t elaborate on the opportunities within this article, but we want to share some important tips to buying an Apartment off the plan.
Selecting your Apartment
In selecting the Apartment, make sure it’s in a suburb or area where it’s already well received. Buying an Apartment 50kms from the city, may not be as wise if house and land packages are cheaper. When buying an Apartment it should be close to infrastructure and amenities, where demand outweighs supply. That way you can be more confident that your investment will increase in value over time.
Review the Contract of Sale
Before proceeding with your purchase, please make sure to review the contract. Obtaining professional legal advice will ensure you are aware of the standard terms and conditions. One condition that is very important to acknowledge is that an off the plan purchase is an unconditional contract. So be smart and discuss your financial circumstances with your finance broker and/or financial planner. You want to know in advance that you will be able to settle the purchase when the time arises in the future. As it’s off the plan, the settlement date will vary depending on many factors such as the size of the development, it’s location and/or time of year to name a few.
Other areas that many Australian need to be aware are:
- What’s the cooling off period – how long is it and what are the conditions?
- Disclosures – are you happy with the level of detail the developer has disclosed?
- Deposit Paid – who holds your deposit until settlement?
- Inclusions and warranties – are you protected if the developer makes a detrimental change to the property during construction? Is there a warranty post the settlement?
- Defects – is the developer liable to remedy all defects after construction is complete? How long do they have to finalise these issues?
- Completion – what happens if construction isn’t completed on time, or at all? Are we compensated? Are we reimbursed?
Research the Developer and the Nominated Builder
It is hard to differentiate who is more important to a successful development. The developer is funding the project and selecting people responsible in administrating, building and settling the property. The builder is responsible in constructing the property to the specifications listed by the developer. They must be fully licensed builders that provide warranties on their work.
Finally, review your financial situation
Remain practical. You may fall in love with the 3-bedroom Apartment with city views, but if you are $200,000 short to settle, what is the point consuming your attention on it. Make sure you are ware of your borrowing capacity. Review other aspects such as the stamp duty implications and other purchase costs to obtain the property. As reiterated earlier… an off the plan purchase (regardless of the property type) is unconditional. You will be contracted to settle the property. Review what you can afford and buy with reason. Don’t over capitalise yourself.
At Crest Property Investments, we specialise in buying new and off the plan property. Feel free to contact us now for a free consultation. We welcome the opportunity to help.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Mar 2018
