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The six pros and cons of buying off the plan

By Jeremy Fisher
06 August 2014 | 12 minute read

Although there are several advantages to buying off the plan, buyers should also make themselves aware of the potential drawbacks.

Property developers who build strata units and retirement homes often make the properties available for sale before they are finished, sometimes before construction has even begun. This is known as selling ‘off the plan’, and buyers can purchase these properties in advance. Although there are several advantages to buying off the plan, buyers should also make themselves aware of the potential drawbacks.

The benefits of buying off the plan


Discounted price

When a property is sold off the plan it is offered for sale at the current market price, but the properties generally take a few years to build so the price is likely to rise with inflation.

Small capital outlay

A buyer is able to secure a property off the plan by putting down a small deposit, usually 10 per cent, with the balance payable upon completion. This gives buyers time to arrange their finances and potentially be in a better financial position when the balance of the property is payable.

Tax savings

When a brand new property is purchased as an investment, buyers are generally able to claim depreciation on fixtures and fittings as a tax deduction.


When buying off the plan you can often make special requests regarding the colours, finishes and layouts as the property is being built. Modern buildings may also include current lifestyle trends such as open plan living areas, a pool, gym and concierge services.

Stamp duty concessions

Several states offer stamp duty concessions to purchasers of new properties.


Like most new items, new buildings up to three storeys high have a warranty on the building structure, which can offer peace of mind for buyers.


The drawbacks of buying off the plan

Lack of certainty 

Developers will go to great lengths to give buyers an indication of what the finished property will look like but factors such as the aspect, quality of the build and the quality of the fixtures and fittings can’t be certain. When signing the contract, the buyer should feel comfortable that their expectations may not be met exactly.


The proposed finish date for a building is generally an estimate and there can be delays.

Developer risk

On some large developments cash flow can be an issue and there is a risk of developers going bankrupt, making them unable to complete the build.

Financing issues

A bank will often provide pre-approval for off-the-plan builds, but the bank will only offer unconditional approval and provide the loan if the property is acceptable in terms of value and quality on completion.

Problems resolving unexpected issues

The property contract will outline how defects are to be amended if such a situation arises. The by law on the property will also outline how factors such as common areas are to be handled. These contracts and laws should be carefully examined.

Higher price

A brand new property will often have a sale price that reflects the newness of the property, just like a new car or a new product. There is also an element of the value reducing initially as the property becomes ‘second hand’ and not new.

Be sure to speak to a mortgage broker or financial planner before buying off the plan.

About Jeremy Fisher

Director and founder of 1st Street Home Loans, Jeremy Fisher, is one of the most awarded mortgage brokers in the industry and winner of the Australian Broker Association’s prestigious ‘Australian Broker of the Year’.

Since 2001, Jeremy has settled in excess of $500 million worth of property loans and delighted clients with exceptional results and a highly personalised service.

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