10 benefits of buying an off-the-plan apartment
Whether buying an investment or a home to live in, an off-the-plan apartment can offer many perks.
Off-the-plan purchases often attract lucrative stamp duty savings and incentives as well as depreciation benefits if you opt to lease the unit to tenants. Because the apartment is yet to be complete, you may also be able to tailor certain features.
1. Enviable locations
Many new apartment developments take advantage of central locations, whether due to a zoning change, because another building has been torn down or possibly the land has simply been undeveloped up until now.
This will often mean the new homes being built are close to transport and amenities, giving buyers an enviable location right in the centre of the action.
For those that are keen to ditch the car and spend more time in their local community, the walk score can be very high in these central locations.
2. Views
For those of us living closer to the ground, it’s hard to imagine what the views 15 storeys up can be but the difference is vast. You don’t need to be located right in the centre of town or next to an ocean for an apartment to have a really special view. All it takes is going up higher and suddenly you’re amongst the clouds. Everything below feels far away and somehow so much more picturesque.
Imagine sipping your coffee each morning as you take in views right across the city. If you think a north-facing balcony is nice on the second floor, imagine what how much light you’d be getting if you lived on the 22nd floor?
3. More time to save
When making a property purchase, every dollar counts. So, having more time to save while your off-the-plan apartment is being constructed can be an appealing option.
“Buying an off-the-plan apartment is great if you need a bit more time to save,” said Emma Baker, from Canberra-based InStyle Estate Agents, which specialises in off-the-plan apartment sales.
“In Canberra, you are able to unconditionally exchange on a 5% deposit with settlement often more than 12 months away. That means there’s another 12 months for you to save the other 5% before you need to get finance. Or if you have a property you need to sell before you settle, you have sufficient time to do so.”
Ms Baker said construction timeframes depend on a lot of factors, including how big the project is, the complexity of the build, the approvals process and variations, but said an average development will generally take between 18 to 24 months start-to-finish.
4. Time is money: start gaining equity immediately
Purchasing an off-the-plan apartment means you can effectively buy at today’s price and start gaining equity as soon as you sign on the dotted line, before construction has started.
In a buoyant market, this can mean you will own a property that’s worth more than you paid for it by the time you move in.
“If you purchase either prior to construction starting or very early on after construction has started, there is a high chance the market will increase before you settle and you will gain equity,” Ms Baker said.
However, it can also go the other way if property prices decline, so buyers should do their research and be aware of the potential risks.
5. Shiny and new
Who doesn’t love something shiny and new? Off-the-plan apartments are exactly that.
Ms Baker said one of the biggest lures for buyers was the fact their purchase was brand, spanking new.
“It’s new – everyone loves new,” she said.
“All off-the-plan properties come with a minimum of 90 days maintenance. You don’t find this in the established market where what you see is what you get.
“In off-the-plan properties, if there is anything that may require fixing (outside of painting), the builder will attend to it.”
6. Incentives
As well as developer and builder incentives, there may be discounts on stamp duty and other taxes depending on which state you’re buying in.
“Off-the-plan properties often have developer incentives – whether it’s cashback or window furnishings, these are all savings,” said Ms Baker.
In addition, some state and territory governments offer stamp duty concessions or incentives to reduce the stamp duty you pay on off-the-plan purchases.
7. Make the floorplan work for you
If you like the idea of having a hand in designing your apartment, buying off-the-plan means you may be able to select your own floorplan and internal colour palette, depending on the project.
“In a project, you will find a number of floorplans to choose from. There are often other upgrades you can add on as well – and sometimes you get to pick the colour palette. There are many ways to personalise an off-the-plan property.”
If you’re anything but a masterchef then don’t bother spending money on a big kitchen, instead focus on getting a bigger living and lounge areas. Similarly with a car spaces and storage cages – why pay for them if you won’t use them?
8. Save money by using the amenities that come with the building
If you’re looking for a resort-style lifestyle, an off-the-plan apartment may deliver and also save you money in the long run.
Many high-rise and medium-rise apartment complexes offer a host of amenities including swimming pools, saunas, communal entertaining areas, break-out barbecue spaces, fully equipped gymnasiums, private dining rooms and in-house cinemas.
Maintenance of these features are usually paid for and supported by strata levies, which are shared among all owners.
“Items such as lifts and building maintenance are also costs included in levies. Levies are divided amongst a project and each residence pays a portion determined by the size of their residence relative to the project. Fees tend to range between $900 and $2500 per annum,” Ms Baker said.
Exercise equipment
If you’re forking out thousands a year for your gym membership then consider what it might be like to be able to use a gym within your own building. Similarly with visits to the pool.
Do the sums to check whether it could be cheaper to sweat it out at home rather than spending extra on memberships.
Entertaining spaces
If you love a rooftop hangout with mates then it’s worth considering the shared barbecue areas that many new developments build as part of the offering.
Having friends over is a whole different kettle of fish if you’ve got a swanky rooftop bar area that overlooks the city. Who needs overpriced cocktails when you can make your own while enjoying time with your friends. You’ll also save money on the fare ride home.
Extra bedroom and sleeping spaces
Some off-the-plan developments even have bedrooms that can be used by visiting friends and family that can be used free of charge.
Why bother paying the mortgage on an extra bedroom when you only need it a few times a year?
9. A future-proof home
New apartments come with everything you need to live the technology-enabled life of your dreams. 5G and NBN are usually standard in a lot of metro areas and you can expect that your Body Corporate will keep things working for you for the life of your home without you needing to lift a finger.
Check with your service provider to see if 5G is available in the area.
10. Your choice of builder
With the number of off-the-plan developments in metro centres set to remain high you have the option to shop around and do research on the developer and builder you feel most comfortable with.
Be sure to do your research and go to some inspections of previously-completed projects by the same teams to get a good idea of their build quality.
Source: https://www.realestate.com.au/advice/benefits-of-buying-an-off-the-plan-apartment/