Property has been in the news a lot lately – thanks to the ever-spiraling cost of homes in many of our main centres which has made it increasingly difficult for young people to get a foothold on the property ladder. Due to demand, and an ever-increasing population, Australia is constantly in need of new properties for people to live in – in fact in recent years it’s been estimated that there is a shortage of 30,000 homes per year being built, which has contributed to the rise in prices.

If you’re looking to purchase a property, either for yourself or as an investment, you have a choice been purchasing an existing property, building your own place, or buying ‘off the plan’.

Purchasing off the plan is a commitment to buying a property that a developer is establishing – you commit to buying it before it is built. This may seem risky and does come with its downsides, but there are a number of advantages too.

  1. You may get a bargain. Developers are in the business of making money – but they also need to keep money turning over and get on to the next deal. You can sometimes secure a good buy when they are first starting to sell a development as they look to get the ball rolling. Likewise, they may also consider selling the last few units off cheap if they want to move on to their next opportunity.
  2. You may benefit from a property upswing. Developments can take a year of two from initial sign up until completion. This can provide you with the chance to benefit from any increase in value for properties during this period. Of course, you may suffer if prices should slump too.
  3. Less money up front. The timeframe of a development can provide you with more time to secure your funding. Generally, you will secure the property for the cost of a deposit with the balance either in instalments or once the deal is completed.
  4. Tax and Other Benefits. If you have purchased as an investment there may be greater depreciation deductions available to you on a new property. You may also be able to attract stamp duty savings or first home buyer benefits depending on your location.
  5. Warranty benefits. New properties will give you the chance to go back to the builders with any defects or faults you may have during the initial period of ownership.
  6. Personalisation. You may get the chance to finalise fittings such as benchtops or curtains that will fit with your own personal choice of décor.

Of course, there are also potential downsides you will need to consider

  1. You are trusting a third party with your deposit and hoping they will follow through. Insurances and consumer protections can provide you with some security but it’s something you need to be aware of
  2. Some financial institutions are reluctant to back off the plan developments or won’t agree to finalise lending until the property is completed.
  3. The longer the project takes the more your money will be tied down. Check for clauses that determine how long the builder has to complete the work.

Above all have a lawyer check the contract and do your homework. Make sure you are paying fair value relative to similar developments in the area. Check out the developer’s reputation thoroughly before signing on the dotted line.


If you’re trying to identify investments and ideas for wealth creation, you don’t need to do it alone. A financial adviser (or planner) spends their days identifying and presenting opportunities to their clients. Our simple, quick, free service will connect you to the best independent financial advisers, based on your needs. Click here to get started.

The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a financial adviser or other finance professional.

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