If you’re looking to acquire a new property off the plan which is still yet to be built, at this time in the Perth market there are greater risks you need to consider. Read on to learn about some of the advantages of buying yet to be completed property, as well as some of the things you should be wary of.
As the supply of properties on the market continues to increase, those developers hoping to move their project forward will have to make their offering really attractive to stand out in a cluttered market place. You will start seeing reductions to prices being offered and things like furniture packages, rental guarantees and other fitting upgrades thrown in. So you can potentially stand to save a lot compared to buying an established property in the area. However make sure you look at the wider picture.
One of the most attractive aspects of purchasing property that is still under construction is that the property can be secured for an extremely small down payment – usually 10% of the sale price but in this market many developers are starting to offer as little as $10,000.
This can be great if you need the time to save but can also be a double edged sword in that if prices move down in the meantime, you may be required to come up with even more money to be able to settle the property.
An off the plan purchase, best suits those that have a strong financial situation. Keep in mind that with most off the plan contracts they are not conditional on finance approval and if you can’t meet your commitment to settle, you will forfeit your deposit and be liable for any difference in selling price. Make sure your solicitor reviews any contracts that you need to sign, there are a lot of clauses that can be overly in the developers favour. The last thing you want is to be locked into a long contract without any assurances that the project is going ahead within a certain time period.
What to Look at
It can be difficult to imagine the full picture of what your home and neighbourhood will look like when they are finished. You should always research a developer’s past projects before committing to a property. In addition, take a deep look at what else is being built and how the current rental and sale market are going. Look for a limited number of new projects, strong demand in the current market and some good infrastructure planned for the area which will further increase its popularity.
Is the risk worth it?
I suggest that to buy in this market have need a very strong financial position must do your research and diligence, before even considering buying off the plan in this market.