Today we’re talking about buying off-the-plan as a First Home Buyer. Here at Andromeda Property Group, our colleagues James & Sarah have a unique perspective on the topic as between them they have experienced firsthand what it’s like being:
- a buyer themselves (both James & Sarah have purchased off-the-plan)
- being a parent guiding their children who have purchased off-the-plan (James’ daughters first property will be purchased off-the-plan)
- and being brokers who hold the belief, “If I wouldn’t buy it or recommend it to my own family then I’m not selling it” James & Sarah have uncompromising standards for the company they choose to work alongside. Only the most highly reputable developers are accepted because the success of our business rests upon our reputation. We only sell to the wider community what we ourselves would be happy to buy. If it doesn’t meet our standards, it’s not going to meet yours & we work by that rule.
Off-the-plan deals sometimes get a bad rap from investors who claim buyers risk paying too much. We completely get it, asking people to part with hundreds of thousands of dollars to buy something that doesn’t yet exist, does sound crazy…but the reality is this method of purchasing is becoming increasingly popular and is allowing people to own the property of their dreams.
Here are 8 good reasons to buy off-the-plan as a First Home:
1. Huge stamp duty savings
One of the biggest reasons for buying off-the-plan is the huge potential for stamp duty savings. Eligible first home buyers pay $0.00 in stamp duty. Your conveyancer/solicitor can assist you further with this provision.
2. Repair cost savings
This one goes without saying. If you purchase a brand new home that has been built to the highest quality standards, then it won’t need the initial or even on-going maintenance that older properties almost always need.
3. Lower power bills
There have been changes to the Australian Building Code which mean new properties must meet stringent energy efficiency requirements. Your Off-The-Plan home must be fitted with some of the most power-saving appliances and gas/water/electricity systems on the market, which is a power saving positive for both you as a buyer and if you’re wanting to rent your property out after a year, a benefit for your tenants too.
4. Potential capital gains
When you buy Off-The-Plan, you’re doing so for today’s price. In our ever-changing market, this can often mean by the time you move in, the property you own is already worth more than what you paid for it. We’ve had clients who in a 1 to 3 year period have had their properties grow in value between $20,000 and $70,000. This type of capital growth is powerful and can allow you to buy another property & begin building your property portfolio.
In saying this, we always recommend looking at capital gains as a bonus and it should never be your reason for buying Off-The-Plan to begin with.
5. Buys you extra time to save
Buying Off-The-Plan is especially appealing for First Home Buyers as it is one of the easiest ways to get into the property market.
For starters, you only need a 10% deposit and can pay the remaining balance of the purchase price at settlement, once construction is complete. (In terms of timing you can be looking at 6 months to 2 years for a build to be complete)
This gives you extra time to save more money which will go towards your moving costs, furniture and of course the house-warming party.
And the more you save over this period the less you’ll need to borrow keeping your loan repayments much lower too.
6. First homeowner grant. The real bonus
If you’re an eligible first home buyer, then it makes sense that your first home is an Off-The-Plan development because it will mean you can receive a government grant. The way it works is you can only receive the first homeowner grant on a brand-new property, not an established house. A search on Google will outline all relevant grants available in your state or territory.
7. Close to all the action you love
Often developments are strategically located close to public transport, within a community where there’s a strong shopping precinct, parks and schools. They do this because they want people to be able to live a certain lifestyle too, one which offers convenience.
8. Higher rental return
Once you are ready to build your property portfolio, you may very well decide to rent out your property instead of selling it. And apartments tend to have a high rental return compared to houses. CoreLogic’s website has all the data to assist with current and historical rental yields throughout Australia.
At Andromeda Property Group, we have a plethora of quality Off-The-Plan properties available right now for your immediate consideration.
