Pros and Cons of Buying Off the Plan
As Australia goes through a housing shortage, builders that offer properties ‘off the plan’ can easily attract homebuyers or property investors as soon as they advertise their new development.
Buying a house ‘off the plan’ allows homebuyers and property investors to unlock their new home in a prime location at a much affordable price. However, it also comes with other considerations as it means getting a property that hasn’t yet been built.
Thinking about buying real estate off the plan? Here are some of its advantages and disadvantages to help you determine whether it’s right for you or not. Let’s start!
- Can qualify for Government grants
Since the home being offered is yet to be built, this means that it may qualify for government grants, such as the new HomeBuilder scheme and First Home Owner Grant.
In case you missed it, HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. Meanwhile, a $10,000 First Home Owner Grant is available when you buy or build your first new home.
- Stamp duty discounts
Buying off the plan may save you a lot of money on stamp duty. If you buy a property before construction begins, your stamp duty will only apply to the land value. You can also visit your state or territory government’s website to see if you’re entitled to a stamp duty reduction for buying off the plan.
- Near-perfect condition and design
One of the greatest advantages of buying off the plan is having an opportunity to get involved in your home building process. It is also advisable to choose a builder that offers custom home design, allowing you to own a property that is tailored-fit for you and your lifestyle.
Remember, the earlier you get it, the more you should be able to customise your house.
- Property value goes up
You no longer have to worry about inflation and other variables that may put your property value at a higher rate when you buy property off the plan. Instead, consider these market conditions as unique opportunities as it could potentially result in a quick profit.
- Builders can go bankrupt
Buying real estate off the plan would be risky if you won’t do some background research on the builder. In fact, there are some cases where a builder goes bankrupt, giving homebuyers a major property headache.
- It can be hard to get home loans
Banks and other lenders won’t actually approve home loans until the property is built. This is because they need to perform a valuation of the finished product and reevaluate your financial status.
- Construction delays
There are some developers that cancel contracts due to construction running past the sunset date or the day by which the developer should fulfil their obligations as stipulated in the contract.
If your property is taking longer than expected, get in touch with your developer to update your contract so that the sunset date falls at a later date than construction completion.
Want to know more about buying a property off the plan?
Get in touch with Preferred Homes and find out if buying a property off the plan is right for you. Call us on 0408 788 351 for a FREE consultation.