Whether owner-occupier or investor, the majority of people in Australia buy ‘second-hand’ property – that is, a property which has already been built, ranging from a few years old, to over a hundred years old in the case of Federation era homes or terraces. A second category is new property or buying ‘off-the-plan’ – which tends to be far less understood, and therefore more difficult to navigate on your own, especially as a new investor or first home buyer.
Buying a house, apartment or townhouse ‘off-the-plan’ means signing a contract to buy a property that is yet to be built. You can view the developer’s plans, designs and renders for the property, but can’t view a physical building.
Buyers pay an initial deposit – typically around 10% – and pay the balance at settlement once construction of the property is completed. The timeline can vary depending on whether it’s a house or apartment as well as a number of other factors.
Currently most of the Government incentives for first home buyers apply primarily to new or off-the-plan property only.
In NSW for example, the state government recently announced that stamp duty will be waived for first home buyers purchasing new properties costing up to $800,000 – representing up to $31,335 of savings.
But while first home owner grants and stamp duty savings may be the first draw card for some, there are other factors which greatly increase the appeal of off-the-plan property, particularly for investors with a ‘buy and hold’ strategy.
Experienced investors are aware of certain cashflow advantages. For example, the difference between the depreciation claimable for second-hand versus new properties is substantial; representing potentially thousands of dollars-worth of depreciation – resulting in a positive cashflow over the year.
There are other benefits too; from being able to enjoy contemporary, architectural design to less maintenance requirements than older, established properties.
At the same time, there are also some factors to be aware of prior to making a purchasing decision. Uncertainty around construction timelines, quality and markets are key considerations as well as the finer details such as contract structure, inclusions or certain tactics such as ‘bait pricing’.
To help potential first home buyers or investors understand this subject, Ironfish has put together a comprehensive ‘buyers guide’ to buying off the plan.
Ironfish is a national property investment services company with an in-house property selection and research team which monitors the market and identifies great quality apartments, townhouses and house and land packages in excellent locations for our investors.
The property team conducts a rigorous due diligence process to assess each property, to make buying off-the-plan as simple and convenient as possible and to provide additional peace of mind for buyers.
Bringing together Ironfish’s 14+ years of experience in this specialised area, reviewing thousands of new developments, this guide covers each property type in detail – houses, townhouses and house and land – complete with checklists and FAQs.
As a preferred property partner, Ironfish is offering BMT customers a free copy of this eBook which can be downloaded below:
For more information about Ironfish’s property selection and other investment services, or to learn more about buying off the plan, please book a free consultation with one of Ironfish’s experienced strategists or visit www.ironfish.com.au.
Article supplied by Ironfish. Information current at time of publishing.