With many state capitals becoming a hive of construction activity, even more properties are being sold off-the-plan.

It’s a purchase option that gives buyers a range of valuable advantages, like saving on price, the option to customise and stamp duty concessions. But splashing out on plans alone may not be the best choice for every buyer. Make sure you weigh up the pros and cons to buying off-the-plan property.

1. The potential to save on price

In a rising market, buying off-the-plan can be a masterstroke. You’re committing to a property at today’s prices and, if all goes well, by the time the development is completed the place will have risen in value, earning you a rapid capital gain.

However, the reverse can also happen. If values weaken, off-the-plan buyers can be left paying more for the property than they would have if they had bought today.

The only way to avoid this is really understand the market. Do good research. Watch the way property prices are behaving. Keep a close eye on small changes in auction clearances and tenancy rates. And bear in mind that the longer your new property takes to complete, the harder it is to estimate how property values will move.

2. Valuable savings on stamp duty

Valuable stamp duty concessions are often available with off-the-plan purchases. The rules are different in every state and territory, so don’t rely on what the developer tells you. Check with the government revenue office where you’re building to find out how much you could save on duty when you buy from the plan.

3. You’ll have time to save a bigger deposit

A 10 percent deposit will usually secure an off-the-plan property. Once this is paid, off-the-plan buyers have a window of opportunity to ramp up personal savings and this can mean taking out a smaller home loan with less to repay each month.

4. An off-the-plan property can be hard to visualise

Purchasing off-the-plan means committing to a property you cannot physically see. The display suite you inspect could differ in layout, size and finishes from the actual apartment you’re buying.

Carefully check the specs outlined in the sale contract for your apartment. There’s no guarantee they’ll match what’s in the marketing material. Get your question-asking voice ready: you need to know as much as possible about finishes and fittings like blinds, curtains, tiles and carpets so you’re clear on what you’ll step into come handover.

There’s also the building itself to think about. What will be the outlook of your apartment? Will it be in the shadow of a larger building for much of the day? Will the bedroom look directly into the block next door? If so, can you see their big TV from your bed?

5. A lender might have restrictions around size

When it comes to buying an apartment, size really can matter. Many lenders shy away from – or ask for a bigger deposit on – very small apartments. That means it can be harder to get finance for places like studio units with fewer than fifty square metres of floor space.

Similarly, specific-purpose apartments like student accommodation can be subject to stricter lending requirements. Speak with a lending specialist before you start looking at off-the-plan properties so you can be sure you understand whether your apartment falls outside normal lending conditions.

6. The contract might be tricky to decipher

Resist the urge to sign on the dotted line until you’ve had the contract of sale thoroughly checked by a solicitor or conveyancer. Off-the-plan contracts are usually more complex than for established homes – often with clauses that favour the developer. Your legal adviser can help with every stage of the buying off-the-plan process, including curly contract clauses.

7. Your new place needs to fit into your own plans

The land is empty. The excavators that will dig your flash new parking space haven’t even arrived yet. That can mean an extended time to completion, and a lot could change in that timeframe.

Think carefully about anything that could have an impact on your ability to complete the purchase further down the track. Even if you no longer want the property, you’re still committed to buying it, and bailing out can be costly.

8. Developers’ reputations can really vary

Opting for properties backed by an established developer with a blue-chip reputation and a proven track record can give you a little more certainty when buying off the plan.

Sticking to reputable developers also gives you the chance to check out completed projects by the same company. How are they looking five years on? How are their tenants feeling about their choice?

Just remember though, all developers are vulnerable to market changes, just like every business. If yours becomes insolvent at any stage during construction, you’ll be in a long line of other creditors trying to get your money back.

Buying off-the-plan apartments can be a great way to save on stamp duty and set yourself up with a place you’ll love. But there are risks, too. Make sure you know what you’re signing up for – from developer to fit-out and all the way through to long-term growth potential. Extracting yourself from a dud deal could be harder than it looks.


Not sure on how to borrow for an off-the-plan purchase? Our lending specialists can held answer all your questions. With a great range of home loan options for off-the-plan purchasing, we’ll be with you every step of the way!

Our team are available for in person, web, or phone based chats. We offer full, no obligation approvals in principle – without the requirement for a face to face chat.

Check out our First Home Buyer difference

We hope you found this article helpful. If you'd like to discuss it further please fill in the form below and we'll be in touch.

This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice. Credit criteria applies to any loan application. Terms and conditions, fees and charges apply to any loan application.