Things To Consider When Buying Off The Plan

No matter how many properties you own – if you’re buying your first home or have an established portfolio – savvy buyers are always looking for incentives to help make their money go further.

While the East Coast property market continually ebbs and flows, CoreLogic has highlighted Adelaide’s metropolitan area as home to some of the best value and best lifestyle options available in the country.

Buying off the plan can be a great way to take advantage of government incentives and discounts provided by developers that will ultimately contribute to the completion of the project. There are certainly some risks involved as well, so let’s have a look at what buying off the plan can offer you.


Buying Off The Plan means you are purchasing a property that only exists on a plan. As in, you cannot go and visit the property because it has not been constructed yet. You can expect a rather thick contract with lots of attachments, as this stipulates what you are actually purchasing – think floorplans, colour schemes and fixtures and fittings.


  • Off the plan purchases allow you the ability to customise your property to some extent, selecting the finishes and tweaking the floorplan to your preferences and lifestyle.
  • The purchase price can sometimes be lower compared to established properties, as the developer is often looking to establish financial stability in the project before construction starts.
  • It’s not uncommon for your property to increase in value as it’s built, providing you with immediate capital growth on your purchase.
  • In most instances, you’ll only need to pay a deposit to the developer upfront – usually 10%. The remaining balance is settled on the completion of the property. This allows you more time to save up before settlement and you don’t need to start paying your mortgage until you actually own the property.
  • If any building issues emerge while the building is being completed, you should be covered by Builder’s Warranty Insurance, meaning you won’t have to pay for repairs.
  • Tax depreciation benefits are better on new properties, meaning you can maximise your after-tax cash flow*. You may be eligible for the state government’s First Home Owner’s Grant to minimise your upfront cash for the purchase.

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  • Lending may be an issue. Banks and lenders will offer conditional approval for Off-The-Plan purchases, but they won’t actually lend you money until the property is built and they have performed a valuation of the finished product.
  • You’ll need a conveyancer or solicitor to look at the contract closely to identify potential costs or conditions that might impact you down the line. Some key questions should include:
    • – Who is responsible for any defects?
    • – What happens if the project is completed either before or after the scheduled completion date?
    • – Can you resell the property before it’s complete?
    • – What happens if you want to pull out of the contract?
  • There is always a risk that the development won’t go ahead. You should get your deposit back, but tying up your money in a failed venture means you may have missed out on other investment opportunities.

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  • If the market falls or interest rates rise between the time you agree to buy and the settlement of the property, there’s nothing you can do.
  • Though you may plan thoroughly, the final product may not match what you’d originally purchased for a variety of reasons. You won’t find this out until the property is complete.
  • It’s not uncommon for developments to experience delays. Best to keep an eye out for any ‘sunset clause’ in the contract of sale which binds the developer to a completion date.
  • Other developments may be scheduled in the same area, so be sure to check with the local council to see how the location may change by the time you’re handed the keys.

Buying off the plan can be a daunting prospect, but when you have an experienced property consultant available to help you through the process, you will find it is an exciting time!

*Ouwens Casserly Projects is not qualified to provide advice on GST and other taxation issues relating to the sale or purchase of property. Prospective purchasers must obtain their own independent professional taxation advice.


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