Raine & Horne Elite Blog

Investing in an off-the-plan apartment has become increasingly popular among Australians, with thousands opting for this route each year. And while it may seem like a daunting path to home ownership, in the majority of cases it pays off with people successfully designing apartments that suit their needs and style, and also delivering.

What does buying off-the-plan mean?

Essentially, buying off the plan involves committing to a property that hasn't been constructed yet and is still in the planning phase. While the concept might sound unconventional, particularly since you're purchasing something yet to be built, it's a common practice, especially in the realm of apartments, offering substantial advantages alongside some inherent risks.

Buyers may engage at different stages, either based on initial plans and visual representations or once construction is underway.

However, the process of settling a property post-contract and deposit can be protracted, spanning months or even years, contingent upon the development's stage and type. The construction timeline, delineated in the sales contract, often includes provisions for regular updates on project milestones, culminating in an anticipated settlement date.

Why buy off-the-plan?

1. Lower purchase price.
2. You can offer a lower deposit.
3. Longer time to save your deposit.
4. Your property may have increased in value by the time it is built.
5. It is brand new.
6. Lower stamp duty.
7. Tax benefits for investors.
8. The apartment is brand new.
9. You can choose the finishes and appliances installed.

What is a sunset clause?

The sunset clause allows both parties to back out and receive a refund of the deposit if the apartment isn't completed and settled by a specified date. This can be a significant advantage for buyers who come across another property they prefer.

What should I look for in a contract?

Always review your contract with a conveyancer. 

The sales contract might seem daunting, but it's crucial for home buyers to grasp its basics. Even if you've hired a conveyancer, having a fundamental understanding of the document is essential. Essentially, the contract outlines the terms and conditions of the sale for both the buyer and the seller.

Key elements typically included in the contract are:

1. Date of Settlement: Clearly specifies when the property will officially change hands.
2. Parties Involved: Names of the purchaser and the vendor.
3. Process and Deposit: Outlines the payment process and the amount of deposit required.
4. Vacancy or Lease Status: Specifies whether the property will be vacant or subject to a lease.
5. Chattels List: Details fixtures and fittings included with the house.

As a general rule, fixtures attached to the property should remain, such as carpeting, curtain rods, and light fixtures. However, there may be occasions where the seller wishes to retain certain items or include additional ones in the sale, which should be clearly outlined in the contract before signing.

Additionally, it's crucial to review settlement conditions before committing:

1. Subject to Finance: Buyers may want to make an offer contingent on securing financing.
2. Building or Pest Inspection: Buyers may require the property to pass these inspections before finalizing the sale.

These conditions must be identified and agreed upon by both parties to ensure a smooth transaction.

If you need assistance finding an apartment to buy, or you're seeking new developments, contact us to learn more.

Disclaimer: The information provided is intended for general informational purposes only and should not be construed as legal, financial, or professional advice. Readers are advised to consult with qualified professionals, such as lawyers, financial advisors, or real estate experts, before making any decisions or taking any actions based on the content of this text.