Buying off-the-plan in Brisbane is an exciting way to purchase a new home. Offering the opportunity to create your dream home is also a great way to ensure you get the best value for money. This guide will explore the top advantages of purchasing a property under construction and explain why it is such a popular option in Brisbane.
You pay less than buying a completed home.
- When buying under-constructed property, you’ll pay less than if you were to purchase a completed home. It is because the developer has already covered some of the costs associated with building and selling a property.
- The advantage here is that you can negotiate your deal on price, which would only be possible if buying from an established seller who has no incentive to drop their asking price or throw in any extras.
You can expect to see capital growth and equity build-up.
- You can expect capital growth and equity build-up when you buy off the plan. Equity build-up is when a lender lends you more than its worth at the time of purchase because it knows that your home will increase in price soon after its completion.
- Capital growth is pretty simple: your property will increase in value over time.
- You can use that money to put down on another property (taking advantage of this opportunity a second time) or invest it elsewhere.
You can expect a significant stamp duty saving.
- You can expect a significant stamp duty saving. Stamp duty is calculated on the property’s purchase price, with different thresholds applied. However, only the difference between your purchase price and the relevant threshold for your area will be subject to stamp duty.
- For example, if you are buying an apartment in Brisbane at $500,000 with an annual land tax of $7000, then there would normally be $8500 in land transfer fees, which would have been paid by yourself or your solicitor/conveyancer.
You can use the time frame of construction to save up funds.
- Purchasing off-the-plan involves purchasing a property that hasn’t yet been built but will be constructed in the future. In this way, you can use the time frame between purchase and completion of construction to save up more funds for your deposit.
- Buying it also gives you flexibility when choosing what kind of home you want.
You can often secure your new property with a small deposit.
- When you purchase a property off the plan, you can often secure your new home with a small deposit. Developers require a 10% deposit in exchange for contracts (EOCT). It means you can pay up to 10% of the purchase price in cash. However, it’s common for buyers to pay in stages or with bank guarantees.
- Suppose you buy from a developer who requires only a 10% down payment. In that case, there’s no need for any loan pre-approval or finance approval because your funds are readily available when needed.
Faster progression in your finance application process.
- Buying off-the-plan is a great choice for those who want to speed up the progression of their finance application process.
- While it’s always important to get your finances in order before purchasing a property, banks are more willing to lend for off-the-plan properties than standard ones.
- It is because they know that you’ll be able to pay back any borrowed money once the building is complete and you’re living in it, as long as there isn’t a major issue with your builder or company.
Financial institutions generally approve contracts for off-the-plan properties.
- Financial institutions generally approve the contract for off-the-plan properties. In most cases, you will get a better interest rate on your loan and a larger amount of money.
- The reason why this happens is that the bank is more comfortable lending to off-the-plan properties. As a result, they are one of the only borrowers who can apply for mortgages with little or no deposit.
- They also offer lower rates on loans and longer repayment terms, so you don’t have to worry about paying interest for too long if you don’t want to do so!
Conclusion
The above points demonstrate that buying off the plan in Brisbane is a great idea for anyone considering purchasing property. There are many advantages to purchasing a property in this manner, and they all help to make your investment more secure and worth the time you put into it. Purchasing off the plan is a great way to start building your property portfolio; also, it will make your financial future a lot brighter!
