Nicola Powell: What you should consider before buying off the plan in Canberra

First-home buyers are struggling to get a foot on the property ladder as prices move ahead quicker than the pace of savings. Trying to find a home that falls under your price limit can be overwhelming but deciding whether to opt for a new or established home can throw in an additional dilemma.

As of July 1, transfer duty on new and established homes under $650,000 have been abolished for first-home buyers in NSW, providing an opportunity to enter the Greater Queanbeyan market. In the ACT, this upfront duty can be minimised to $20 if an entry-level buyer purchases a new home under $470,000. Entry-level home hunters that have set their sights on Canberra may opt to purchase off the plan to take advantage of the duty incentives. In light of the development boom mid- to high-rise provide an ultimate choice.

Deciding to purchase off the plan comes with a plethora of considerations before signing the contract. Ensure a legal professional, someone who specialises in contract and property law, looks over the paperwork. It is an imperative part of buying off the plan and essential you know what the contract entails. What are the contract bounds if you decide to jump ship before completion? Is there a cooling off period? To what extent are the plans disclosed? The questions are endless. A professional can shine some light on what should and should not be in the contract. It is money worth investing.

Become a detective – this is a serious recommendation. Conducting due diligence on the development is essential. It is important to research background information on the developer and/or builder to ensure they are reputable. This could involve the confirmation of licences and insurances, seeking out past and present projects and ensuring the correct development and construction approvals have been sought. It is surprising the number of buyers who purchase with their eyes closed – metaphorically speaking.

Location motives of an owner-occupier will differ from an investor but it is essential to choose the suburb and property wisely. Select the dwelling in prime position, away from noise, the largest floor plan, convenient designated parking, and good storage facilities. By maintaining a point of difference from the other dwellings in the development it should lead to a better resale value.

It can be attractive to lock in a home at today’s price with the added benefit of an extended period of time before settlement. It gives additional time to save before settlement. Locking in a home at today’s price could risk a lower value upon settlement; on the flip side, the home could have positive capital growth. It is a risk associated when buying off the plan. Ensure you have a thorough understanding of market dynamics and investigate any neighbouring developments in the pipeline that could impact on price. Ultimately, price fluctuations may not be of immediate concern if purchasing as a long-term home.

Nicola Powell is a property expert for Allhomes. Twitter: @DocNicolaPowell