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How to buy off the plan

Understanding the basics of purchasing a new build apartment,
home or house and land package off the plan for Australian home buyers.

Let's face it. There are some major attractions to buying a property off the plan: the excitement of everything being brand new on move-in day; you can completely avoid the stress of an auction; and you have more assurance of the total budget compared to building your own home or renovating. But what do you need to know about the process of buying off the plan to ensure it’s the right option for you? 

You’ve come to the right place. In this page we cover:

With residential land and housing in high demand and an incredibly competitive property market, the option of buying a new home ‘off the plan’ is becoming increasingly popular for Australian home buyers.

Yet buying an off the plan apartment, home or house and land package can seem like a daunting experience if you’ve never done it before, particularly if you’re a first home buyer. Perhaps you’re unsure of the options available, where you want to live or have questions around finance. If you’re an investor, you need to know how the numbers work and who could manage the property.

Whatever your motivations, buying off the plan adds another aspect to the decision-making process when you can’t physically ‘see’ the property you’re planning to buy. Like any property transaction, it comes with risks and benefits, so ensure you arm yourself with the right information and look for a team of professionals you trust to guide you through the process. 

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What does it mean to buy off the plan?

Buying off the plan means exactly that. Purchasing a townhouse, house or apartment that has not yet been built. Unlike other types of property sales, buying this way means you’re purchasing a product that will be completed in the future instead of one that is finished and can be viewed prior to sale. 

When buying off the plan you enter into a contract with the developer either before or during the construction phase. To secure your new home, you pay a deposit, with the balance due on completion. 

Purchasing a property off the plan typically comes with a fixed price contract and includes many inclusions that  you need to move in right away, once it’s finished. This gives you much more assurance that the project will be delivered on time and on budget compared to building a new home yourself.

While the floorplan is set, as the buyer you can often customise some of the details such as the colour scheme, carpets, tiles and benchtops. So you get the best of both worlds - there’s not so many ‘ground up’ decisions to make which can be overwhelming (ask anyone who has managed a new build from scratch!), yet you still have the ability to tailor the finishing touches to your taste.

Why should you consider buying property off the plan? 

Buyers benefit by locking in a price now, then not paying anything more until the property is complete. If you’re already paying rent or a mortgage, this means no duplicate household costs. Further, with rising market conditions, your property could be worth significantly more at the time you move in, than what you paid for it. 

When purchasing off the plan, buyers often make considerable savings on stamp duty and government grants are often available for both new builds and off the plan properties for sale. Buying off the plan also provides flexibility if you’ve saved up your deposit but need more time to organise your finances to pay the balance.

Another big advantage investors often fail to consider is the new property depreciation benefits. There are significant depreciation deductions available to the owner of the property purchased off the plan. These can be claimed once the property is completed and generating an income. 

What are house and land packages?

House and land packages are when a buyer secures a block of land and the construction of a home together. They involve one transaction but two contracts of sale — one for the land and one for the house. 

They can come as a complete package where everything is included and ready for buyers to move in once complete. Alternatively, some or none of the inclusions are part of the package but can be added during a pre-start planning session with the builder.

When considering a house and land package, firstly decide where you want to live.  If you’re thinking about living in a master plan community, do your research to get a feel for the area and community. Then start the process of evaluating the house and land package options within that area or development. Often many different builders provide house and land packages within a particular residential land community, so it’s a good idea to visit display villages so you can see what design will suit your lifestyle. If you happen to fall in love with a particular design, builders will offer the option of building that design anywhere - so you may not always be restricted to building in that particular area.

As with all property purchases, it’s important to understand your budget. The house will come with set inclusions but you may want to make changes to these, which will come at an additional cost. Some builders will include more than others so be mindful when comparing pricing. 

Finally, look for a builder with credentials and proven experience. If it’s a complete package, make sure you know what’s included. 

Spec homes vs house and land packages

Spec homes can be similar to house and land packages, but they’re usually complete homes with minimal opportunity to customise the design or finishes. Spec homes often come as property packages priced at a certain promotional price point. Considering a turnkey spec home? Here's what first home buyers need to know.

Townhouses and apartments

Townhouses and apartments

Thinking about buying a new apartment or townhouse off the plan in a Cedar Woods community? We’ve created this handy guide to walk you through the entire process from choosing your property to move-in day.

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Does it cost more to buy off the plan?

No, in most cases it costs less. A major attraction of this process is buyers agree to a set price but the value of the property often increases by the time it’s ready for the buyer to take possession. 

There is also more certainty around building costs when you buy off the plan. If the cost of materials goes up for example, typically this is the developer’s responsibility.*  It’s important to choose an established, reputable developer/builder for your investment. If this type of work is their ‘bread and butter’ you can be assured that your project will be delivered. The risk of working with small, independent developers and builders is that they may not have the experience or financial capacity to see a project through, should the market change and their costs increase dramatically which could leave you - well and truly - in the lurch.

Tip: When comparing existing dwellings to buying off the plan, a key difference is related to market value. If you buy off the plan and the market moves up, you make money. If it falls, you lose. Established properties sell at their current market value, and that’s it!

*In the current climate where construction costs are increasing dramatically due to the impacts of Covid-19 on materials and the supply chain, many builders of house and land packages are working with buyers to manage increased costs of their build. However, off the plan contracts for apartments and townhomes are locked-in - the downside being that if costs escalate for these types of builds, there’s added risk that developments may be cancelled. As with any economic conditions, this trend is likely to change as the global economy adjusts to the pandemic.

What types of properties can you buy from Cedar Woods? 

Cedar Woods has been developing properties and building vibrant Australian communities for 34 years. We provide diverse house and land and other housing options to meet the needs of all home buyers. These include large residential land communities in up and coming growth corridors, and apartments and townhouses in established suburbs. There’s something for everyone.

With Cedar Woods, properties bought off the plan are completed, ready for buyers to move into as soon as construction is finished. We are committed to quality and our satisfied homeowners are a testament to the standard of our builds. 

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So is it right for you?

The number of Australians buying homes off the plan continues to increase, largely due to buyers - both owner-occupiers and investors - working out that they’re good value compared to other home ownership options. 

Whether you’re experienced in the property market, a first home buyer or an investor, if you’re considering buying off the plan, take time to choose the right package and look for an established developer/builder partnership to ensure your project (literally) goes to plan.

A new home is an investment for the future for yourself and your family. No matter what size property you build or your reasons for moving, buying off the plan can provide benefits at any stage of life. 

As a leading national property development company, Cedar Woods is here to help guide you through the process. Our projects embody a long-standing commitment to quality and the creation of dynamic and vibrant communities.

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