What Are the Risks & Benefits Associated With Buying off the Plan?
Buying off the plan can be a great way to purchase a brand new property, and get your start, but there are risks and benefits involved.
For many Aussies, buying their first home is one of the biggest purchases they will ever make. Buying off the plan can be a great way to purchase a brand new property, and get your start, but there are risks and benefits involved.
What is off the plan?
Buying off the plan means buying a property that hasn’t been built yet, or is still under construction. When making your decision, you are buying based off the building plans and designs, rather than the finished product. Some examples include:
- House and land packages
- Apartments
- Townhouses
How does it work?
When buying off the plan, you’ll sign a contract for a house (and land, where applicable) based on the building plans and designs. Typically, this involves putting down a deposit when signing, and paying the full balance when the property is complete.
What are the risks?
When purchasing off the plan, there are some risks involved including:
- Construction delays
- Increased costs once construction begins or if construction is delayed
- Final product may not meet your expectations
- Development may not go ahead or builder may go bankrupt
- You may not get approved for the loan
- Depending on the type of home, there may be high strata fees
What are the benefits?
There are also some benefits to purchasing off the plan including:
- More time to prepare and save
- Property value could increase depending on when you buy
- Discounts if you’re purchasing in early stages
- Stamp duty concessions
- Depending on the type of home, you can have a say in the design
How do I know if off the plan is right for me?
If you’re considering purchasing off the plan, some questions to consider are:
- Contract terms
- Where will you stay in the interim?
- What if there are changes to the building plans?
- Are you happy with the quality of finish?
For many Aussies, buying their first home is one of the biggest purchases they will ever make. No matter what kind of property you’re buying, it’s important to consider what suits your needs and lifestyle. Learn more about the benefits and risks associated with building a new home, or buying an existing home here.
This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.
Related
The Upfront and Hidden Costs Of Buying A Home
More questions?
We have more answers.
Got a question?
Ask us anything.
There's plenty more to love
- Annual rate discountIn year010.01%
p.a. Application Fees
Banking Fees
Account Fees
Change Fees
Exit Fees
Say no to fees.
- Award winning value
Built by Australia's leading bank.
- Apply in minutes.
6 steps.
And done.00:00:00
A home loan you can love
Low rates, with a discount that gets better and better.
No fees from us
No application fees, no account-keeping fees, no annual fees.
Apply in minutes
Switch to Unloan today.
Built by CommBank
Unloan is a digital home loan, built by Australia's leading bank.