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One of the major questions for first home buyers is whether it’s better to buy off the plan or purchase an existing home. Not only does buying off the plan mean they get a brand new house or apartment, but it’s often also cheaper than an existing property in the same area.
Developers often sell houses off the plan in order to partly fund a development and because of this it can be a cheaper way to get into the housing market. This is particularly so in a rising market, as the buyer can lock in today’s value rather than the higher price they might pay in a year’s time. There are also potential tax benefits over buying exisiting property.
However, there are risks inherent in paying a deposit for a property that isn’t yet built, such as that the developer could go bankrupt during construction or the builder may not meet deadlines. Price can be a negative as well as a positive as buyers have to consider whether property prices could fall before the house is built.
There are way to mitigate these problems though such as dealing only with a reputable developer, and paying for advice on the plans, similar to having a property report done on an existing property. Having an audit done once the house or apartment is built to ensure the property is to the same standard as was specified in the sale contract is beneficial, and buyers should make sure the details of the fittings are spelled out in the contract, for example the desired model and brand of appliances.
