Tips for buying off-the-plan with confidence
In Australia’s current apartment market, concern over build quality has led buyers to be cautious when buying off-the-plan. However, it’s important to realise that there are plenty of exceptional buildings being constructed today which feature 7+ star environmental ratings, cutting edge technology, intuitive master planning and innovative architectural design. These new developments will hopefully shift the perception around buying a new apartment and provide a reference for future builds to replicate.
So how do you differentiate a good development from a bad one?
While it’s relatively subjective as to what defines a “good development”, following these 8 steps will ensure you feel more confident that the property you’re looking at is right for you.
#1 Research the developer, architect and builder’s track records extensively
Rule 101 of buying a new apartment is undertaking thorough due diligence.
Begin your search online by entering multiple variants of the team’s credentials.
- You can do this by searching [developer’s name] on Google > Tools > All results > Verbatim
- To find recent content, select Any time > Past month/past week
- And to find any news coverage, select the “news” tab in Google
You can then search for the developer’s previous projects on Urban – and take a look at them in real life. Find out if you can speak with any residents who live in one of the developer's buildings, and ask them if they're happy with their home, if there have been any issues since they’ve lived there and whether their apartment was delivered on time.
Another important way to gather information is to approach industry representatives, such as town planners, master builders and environmental consultants and ask for their honest opinion of the quality of work produced by the project team. This could be a simple task of visiting your local council office or picking up the phone to call a few different companies.
McGrath Projects’ General Manager Adam Sparkes also stresses the importance of a background check.
“My advice to any potential purchasers of brand new or off-the-plan properties would be to undertake a thorough background check on both the developer and the builder. What legacy buildings have they delivered in the past? Check for local, national and international industry awards.”
Adam Sparkes McGrath Projects General Manager via Smart Property Investment
#2 Get finance pre-approval before you begin your property search
Buying off-the-plan is an attractive option to many due to its perks, such as substantial discounts or cashback offers for early buyer inquiries. Securing your finance ahead of your search will give you more bargaining power when it comes to making an offer.
“When buying an off the plan apartment early on, you’ll be able to lock one in at current market value for as little as 10%. Construction could well take a year or two, but in that time, the market value of your property is likely to increase. By getting in there early, you’ll avoid paying fees for being late to the chase down the line.”
Ruralco Property, via 6 Tips for investing in off-the-plan apartments
#3 Ask to see a comprehensive material list
Aesthetics are usually the first thing buyers will look at in a new apartment. Instead, you should be focussing on the longevity and quality of the materials used. Take the list to a few different building experts for a second opinion and do your own research online. Consider the pros and cons of each building material that will be used – and if you'd prefer wooden floors over carpet, it's always worth asking the sales agent as often interiors of apartments are relatively customisable.
#4 Talk to other people who have bought off the plan
If it’s your first time buying off the plan, reach out to someone who has already been through the process themselves. Join property Facebook groups; chat to friends and family; read online forums – absorb all the information you can. You may learn about a great new incentive a particular developer is offering, or perhaps a firm to watch out for. Unbiased and honest reviews will give you more certainty about your decision.
#5 Explore the area by foot
Even if there is no building at the site, walking around the area will give you a good feel for the suburb. You’ll also be able to discover what is within walking distance from your future apartment. While the apartment renders may look perfect online, the physical location of the development is arguably more important.
#6 Choose your apartment carefully
Whether there are 10 or 100 apartments on offer, selecting the one for you can be a challenging task. Firstly, think about practicality – if it’s easy access you’re after, ground floor apartments are probably best for you. If a view is your priority, decide which side of the tower has the aspect of your choice. If you’re after lots of sunlight, choose a north-facing property.
#7 Prepare yourself for any unforeseen problems
Sometimes build schedules run late, or plans can require iterations before consent is approved. In this case, you have to be aware that there could be some blockers and the only option is to go with the flow. Communication with the sales agent will help you to stay up to date with the construction process – as well as following the project on Urban!
#8 Ask questions
Prepare lots of questions before meeting with the sales agent. Don't be afraid to ask the agent too many questions, as providing you with answers is what will help them secure a sale. Before making the purchase, you need to feel confident that you have raised any concerns you may have first.
Here are a few examples:
- What is a rental guarantee?
- What are the body corporate fees
- What is the completion date
- How close will my apartment reflect the renders in the brochure?
- What features/appliances/extras are included and what are not?
- Is there a cooling-off period?
- Will I get my deposit back if the sale is not completed?
- What happens if I can't attain finance by the specified date?
- If I discover any building defects down the track, who will cover the remedial work?
- What happens if construction is completed late?
- Can I purchase this apartment using a First Home Buyer Grant?
Once you've done your research and feel confident that the off-the-plan apartment or townhome is right for you, then it's time to navigate the buying process – our First Home Buyer Guide outlines this in detail.