New developments are popping up all over the place and are often considered a more affordable way for people to enter the real estate market or to grow an investment portfolio. We touched base with Stephen Ivanusa, Director of Belle Property International, for his insight into buying off the plan.
“Get in early. Developers often need to meet quota prior to construction beginning, giving buyers the opportunity to secure an apartment at a pre-release price,” says Stephen. “This approach is perfect for first home buyers or the avid investor who is looking for margin windfalls.”
Understand the schedule of finishes and if they’re likely to change. Often, what you see in a display suite or on a finishes board may change at the developer’s discretion, so be sure to ask questions and receive all answers in writing.
As with buying an existing property, secure your finance approval first. Protect yourself from falling in love with something you can’t afford by understanding how much you can borrow and then have the deposit ready. With this approach, you have negotiating power and the ability to remove a property from the price list with a quick deposit.
Before you sign on the dotted line, make sure you visit the site location. Take the time to walk around the site and surrounding area, and listen out for traffic noise. When leaving work, drive yourself to the site and gauge how the traffic is at peak hour.
“Research the developer and make sure they are credible and recommended. It is important to understand their history, past workmanship and future pipeline,” says Stephen. “You need to be satisfied with the construction timeline. Make sure the developer has the financial security to complete the project, and check the sunset clause in your contract of sale.”
Finally, identify your state-specific grant and stamp duty exemptions. Often savings of $5000 to $20,000+ are waiting for you in government exemptions, and you can find out what you’re entitled to by speaking to your broker and solicitor.