Bathurst Blog

Best to buy?

Why do property developers sell off-the-plan? There are many reasons, but it’s usually that if a property developer puts a finance proposal to a lender, the lender usually wants to see a good percentage of the proposed project sold before advancing any money. Hence lots in a development are sold on the basis that they will be built in accordance with approved plans, and financiers generally accept this.

Generally off-the-plan properties are designed and built with investors in mind. As a general rule someone buying a property to live in wants to move in immediately. The advantage for investors is that they generally secure a property at current prices, and in a hot or rising real estate market the value of the property will increase considerably before final payment.

But not always. Considering finalisation may take some time, risks that must be considered. Some are:

  • The property market values may fall
  • Interest rates might rise before you tie in your finance
  • You cannot actually see the quality of what you buy
  • Sale contracts usually give a developer considerable scope to make variations, extend time frames and make changes to specifications

Buying established real estate offers a much lower overall risk. Established real estate is usually in a better location and provides a more secure investment opportunity. You’re less likely to be competing with cashed up foreign buyers who don’t understand current market values and often overpay. Put simply, ‘you get what you see’.

Raine & Horne Bathurst can help you in any real estate matter. Contact our office for a chat.

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