[on-demand webinar] the pro's and con's of buying off the plan
TRANSCRIPT
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Dennis Wong
• Product & Training Manager.
• Property investor for the past 10 years.
• Great amount of industry experience.
Material contained in this presentation is an overview only. It should notbe considered as a comprehensive statement on any matter nor reliedupon as such.
This presentation contains general information only and does not take intoaccount your personal objectives, financial situation or needs and youshould consider whether the information is appropriate to you beforeacting on it.
Before acting on any information you should consider seeking advice froma financial adviser and your accountant before making any financialdecision in relation to any matters discussed in this presentation.
General advice disclaimer
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What is Off-the-Plan Property?
A property that is available for sale before construction begins.
• Apartments, townhouses & houses.
• Different to House & Land.
Off-the-Plan Vs House & Land
Off-the Plan
• 1 contract that includes both the house & land components.
• You become the owner at the end of the construction process & settle in a single day.
House & Land
• 2 contracts – 1 for the land & 1 for the house.
• Buy & settle on the land first; loan is taken out on the land only.
• 2nd loan is then taken out (construction loan) & builder is engaged tobuild the home. Payments are made in stages as the build progresses.
• You own the land at the beginning of the process.
Off-the-Plan Vs House & Land
House & Land – Full turn key
Some builders may not include everything you would expect.
• Vertical blinds
• Ceiling Fans
• Driveway
• Shelving
• Eaves
• Mirrors
• Fencing
• Clothesline
• Tiles & Carpet
• Landscaping
• Letterbox
• Vanities, tapware & toilet suites
• Bathroom exhaust fans
• Air-conditioners
• Light fixtures
• Security screens
Pro’s of Buying Off-the-Plan
• Low Initial Capital Outlay (10% deposit)
• Brand New
• Lower Maintenance Costs
• Buying at today’s prices
• Build equity without incurring any loan payments
• Warranties
Pro’s of Buying Off-the-Plan
• Modern Living
• More attractive to tenants
• Customisation may be available
• Depreciation
• Government Incentives
• First Home Owners Grant
• Stamp Duty Concessions
Pro’s of Buying Off-the-Plan
Government Incentives
• QLD
• $15,000 or $20,000 grant for first home owners (value less than$750,000).
• NSW
• $10,000 grant for building new home up to $750,000 & buying newhome up to $600,000.
• Stamp Duty abolished on all homes up to $650,000; stamp dutyrelief for homes up to $800,000 for first home buyers.
Con’s of Buying Off-the-Plan
• Can’t see the end product
• Additional fees for extras (driveways, landscaping, fencing etc.)
• Sunset Clauses / Delays
• Developer goes bankrupt
• Higher Strata Fees
Con’s of Buying Off-the-Plan
• Increasing Interest Rates
• Financing
• No Uniqueness / Individuality
• Property / Market Value Decreases
Where to buy?
• Close to jobs, transport, cafes, schools, universities, entertainment etc.
• Increasing populations.
• Low vacancy rates.
• Limited supply of land.
• Is it too close to a major road, highway or train track?
• Is it too close to industrial properties?
Infrastructure – State Government
http://www.statedevelopment.qld.gov.au
Infrastructure – State Government
http://www.planning.vic.gov.au
Infrastructure – Federal Government
http://infrastructureaustralia.gov.au
Research – Love the numbers, not the property
• Average Days on Market – Sales & Rental
• Vacancy Rates
• Median Price – Listing & Sold
• No. of Auctions
• Clearance Rates
• Level of Discounting
• Comparable Sales
• Low, median & high price ranges
• Sales History
• Listing History
Research – Love the numbers, not the property
• Jellis Craig - Fitzroy: 9 sales with average of 22 days
• Nelson Alexander – Fitzroy: 21 sales with average of 30 days
• Peter Markovic Real Estate: 2 sales with average of 26 days
Research – Love the numbers, not the property
• Hocking Stuart – Brunswick: 10 rentals with average of 18 days
• Nelson Alexander – Carlton: 6 rentals with average of 11 days
• Nelson Alexander – Fitzroy: 26 rentals with average of 25 days
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