Buying Off the Plan: Opportunities, Risks, and Smart Tips

7 top tips on buying off the plan

How Buying Off the Plan Works

When developers sell off the plan, they’re seeking early sales commitments to help secure finance for construction. In return for your deposit, you receive a contract detailing your specific property, estimated completion date, and the decision deadline for the development to proceed.

If the developer can’t secure finance or cancels the project, you should be entitled to a refund of your deposit, though this depends on the conditions outlined in your contract.

Since full payment isn’t required until settlement (typically one to three months after completion), buyers gain valuable time to prepare financially. However, it’s crucial to read your contract carefully and seek independent legal advice before signing.

The Advantages of Buying Off the Plan

1. Time on Your Side

One of the biggest advantages is time. Unlike a traditional property purchase, which usually requires quick finance approval, buying off the plan gives you 12 months or more to organise your finances. Savvy buyers use this window to save more, reduce borrowing needs, and strengthen their loan position.

2. A Brand-New Home Without the Stress

If you dream of a new home but dread the idea of managing a build, an off-the-plan purchase is a great compromise. You won’t design every detail, but most developments allow some customisation of finishes and fixtures. Make sure your contract clearly outlines what you can choose and confirm any extra costs upfront.

3. First-Home Buyer Benefits

First-home buyers may be eligible for government grants or stamp duty concessions, depending on the state or territory. These incentives can make off-the-plan properties even more attractive. To check what’s currently available, visit your local government’s website or use tools like stampdutycalculator.com.au.

4. Investor Incentives

Off-the-plan apartments are often marketed to investors for the tax advantages associated with new builds, particularly depreciation allowances on the building and fixtures. Developers may also offer rental guarantees, but be cautious: inflated rent promises can mask an overpriced property. Always research local rental markets to ensure figures are realistic.

When the rental guarantee expires, you may find the true market rent is lower than expected. If you’re investing, confirm that you can choose your own property manager once construction is complete.

The Risks: What to Watch Out For

1. Market Fluctuations

While property generally performs well over the long term, short-term price movements can go either way. If the market softens between purchase and completion, you could end up paying more than your property’s market value at settlement.

2. Oversupply Concerns

Some regions have seen an oversupply of apartments, putting downward pressure on prices. Before buying, research the local market: Are more developments planned nearby? Are new infrastructure projects (like transport or business hubs) driving real demand?

3. Developer Reliability

Not all developers are equal. Take time to research their track record, including build quality, timelines, and customer satisfaction. If possible, visit past projects to see the finished results for yourself.

My Top 7 Tips for Buying Off the Plan

1. Get professional advice early. Speak to a solicitor, financial advisor, and mortgage broker before signing anything.

2. Confirm your deposit protection. Make sure you’ll get your deposit back if the project doesn’t proceed.

3. Understand every detail. Your contract should specify materials, finishes, inclusions, and completion timelines.

4. Know your customisation options. Check what you can personalise and at what cost.

5. Ask about resale flexibility. Can you sell your contract before completion if your circumstances change?

6. Request site inspections. Ensure you’ll have opportunities to view progress during construction.

7. Plan your finance strategy. Talk to your mortgage broker about the best loan structure for your situation.

The Bottom Line

Buying off the plan can be a smart and rewarding move, offering time to prepare, potential capital growth, and the excitement of owning something brand new.

But success comes down to careful research, due diligence, and professional advice. If you take the time to understand your contract, the developer, and the local market, you’ll put yourself in the best position to turn your off-the-plan purchase into a great long-term investment.

Disclaimer:

The information provided on this website is for general information and educational purposes only. It does not take into account your personal objectives, financial situation, or needs, and should not be relied upon as financial, legal, or tax advice. While we strive to ensure the content is accurate and up to date, we make no guarantees of its completeness, reliability, or suitability. Any reliance you place on the information is strictly at your own risk. We recommend that you seek independent professional advice before making any financial decisions, including from a licensed mortgage broker, financial adviser, or tax professional. References to government schemes, grants, or lender products are subject to change and eligibility criteria. Please confirm details with the relevant authority or provider. We are not responsible for any loss, liability, or damage incurred as a result of the use of this website or its content.