Brunswick Blog

Today we’re talking about buying off-the-plan as a First Home Buyer. Here at R&H Brunswick, our Directors Robert & Mario have a unique perspective on the topic as between them they have experienced firsthand what it’s like being:

• a buyer themselves (both Mario & Robert have purchased off-the-plan)
• being a parent guiding their children who have purchased off-the-plan (Mario’s daughters first property will be purchased off-the-plan)
• and being agents who hold the belief, “If I wouldn’t buy it or recommend it to my own family then I’m not selling it” Mario & Robert have uncompromising standards for the developers they choose to work alongside-only the most highly reputable developers are accepted because the success of our business rests upon our reputation. We only sell to the wider community what we ourselves would be happy to buy. If it doesn’t meet our standards, it’s not going to meet yours & we work by that rule.  

Off-the-plan deals sometimes get a bad rap from investors who claim buyers risk paying too much. We completely get it, asking people to part with hundreds of thousands of dollars to buy something that doesn’t yet exist, does sound crazy…but the reality is this method of purchasing is becoming increasingly popular & is allowing people to own the property of their dreams.  

(Mr Nichols Development in Brunswick East-Exterior Facade CLICK image to see more)

Here are 8 good reasons to buy off-the-plan as a First Home Buyer in Melbourne:

1. Huge stamp duty savings

One of the biggest reasons for buying off-the-plan is the huge potential for stamp duty savings, for example, we’re currently selling properties for a development in Fitzroy called Mr Nichols, eligible first home buyers pay $0.00 in stamp duty.

2. Repair cost savings

This one goes without saying, if you purchase a brand new home that has been built to the highest quality standards then it won’t need the initial or even on-going maintenance that older properties almost always need.

3. Lower power bills

There have been changes to the Australian Building Code which mean new properties must meet stringent energy efficiency requirements. Your off-the-plan home must be fitted with some of the most power-saving appliances and gas/water/electricity systems on the market, which is a power saving positive for both you as a buyer & if you’re wanting to rent your property out after a year, a perk for your tenants too.

4. Potential capital gains

When you buy off-the-plan you’re doing so for today’s price. In our ever-changing market, this can often mean by the time you move in, the property you own is already worth more than what you paid for it. We’ve had clients who in a 1-3 year period have had their properties grow in value between $40,000 & a $100,000, this type of capital growth is powerful and can allow you to buy another property & begin building your property portfolio.

In saying this, we always recommend looking at capital gains as a ‘little bonus’ & it should never be your reason for buying off-the-plan to begin with.

5. Buys you extra time to save

Buying off-the-plan is especially appealing for First Home Buyers as it is one of the easiest ways to get into the property market.

For starters, you only need a 10% deposit and can pay the remaining balance of the purchase price at settlement once construction is complete. (In terms of timing you can be looking at 6 months to 2 years for a build to be complete)

This gives you extra time to save more money which will go towards your moving costs, furniture & of course the house-warming party.

And the more you save over this period the less you’ll need to borrow keeping your loan repayments much lower too.

6. First home owner grant-the real perk

If you’re an eligible first home buyer (See if you're eligible for the grant HERE) then it makes sense that your first home is an off-the-plan development because it’ll mean you can receive a grant. The way it works is you can only receive the first home owner grant on a brand new property, not an established house. Here in Victoria, a grant of $10,000 is currently available for contracts signed on or after 1 July 2017 where the amount paid is $750,000 or less. 

7. Close to all the action you love

Often developments are strategically located close to public transport, within a community where there’s a strong shopping precinct, parks and schools. They do this because they want people to be able to live a certain lifestyle too, one which offers convenience. For us, our development in Fitzroy called Mr Nichols is right in the heart of the action, cafes like Pope Joan & Milkwood will literally be a minutes walk away.

8. Higher rental return

 Once you are ready to build your property portfolio you may very well decide to rent out your property instead of selling it. And apartments tend to have a high rental return compared to houses. In Melbourne houses have a rental yield of about 2.8% whilst units have a 4% rental yield according to CoreLogic.

Speaking of quality off-the-plan developments, check out Mr Nichols here, we now only have 6 apartments left & they are flying out the door so register your interest today if you'd like to know more. 

Next week we’ll be talking about the top 10 Questions to ask your agent before you purchase off-the-plan

 Big Love - The R&H Brunswick Team Xx