Off-the-plan sales going gangbusters in western Sydney
Media release - 21 October, 2016
- Off-the-plan properties priced below $550,000, which are exempt from transfer duty, are very much in demand in Sydney’s west
- Werrington and St Marys are proving to be development hotspots
- First time buying activity is dominating investor action
Off-the-plan sales are going through the roof in Western Sydney, with first time buyers scrambling to take advantage of the First Home Owner Grant (New Homes) scheme, according to leading property network Raine & Horne.
“Our offices are reporting off-the-plan properties priced below $550,000 that have transfer duty exemptions are very much in demand in suburbs such as Werrington and St Marys,” said Angus Raine, Executive Chairman, Raine & Horne.
“I acknowledge the warnings about buying off-the-plan apartments. However, suburbs such as Werrington and St Marys have excellent long-term prospects as a consequence of the decision to finally build a second Sydney airport at nearby Badgery’s Creek.
“Savvy first-timers are acknowledging now is the time to get into these markets before prices really take off.”
Peter Diamantidis, Sales Manager at Raine & Horne St Marys, agrees the first home buyer benefits are attracting plenty of business to western Sydney. “This time last year, around 80% of our buyers were investors. First time buyers seeking to secure new properties are driving market activity now,” said Mr Diamantidis.
“We have sold 50 properties off-the-plan this year as more developers are recognising the value of using a real estate firm like Raine & Horne rather than project marketers.”
New three and four-bedroom townhouses are proving to be the property of choice for first home buyers. “Any properties under the magic $550,000 tax exemption threshold are selling like hotcakes,” said Mr Diamantidis.
“Many of the first buyers can’t afford $750,000 for a house in St Marys, so a townhouse is the next best thing. They can pay 10%, or less, upfront, and then don’t have to worry about the final payment until the property is completed.
“Compared to a unit, a townhouse offers more space. You might pay $450,000 for a two-bedroom apartment, so with a townhouse, for a little bit more, you get double the bedrooms and double the land size. This is great news for those buyers with plans to start a family.”
In nearby Werrington, townhouses are proving popular with first home buyers, according to Gary Rossetto, Principal, Raine & Horne Penrith. “We’ve sold plenty of townhouses this year, including a project in Victoria Street, Werrington, which fetched up to $590,000 off-the-plan,” he said.
“We’ve also sold 10 of 13 townhouses in a development in Irwin Street, Werrington in just 4 weeks.”
Currently, Raine & Horne Penrith has three bedroom townhouses with an ensuite and garage for sale from $510,000, and four bedders from $520,000.
For those new to buying real estate off-the-plan, Mr Rossetto offers some sensible advice. “You are better off buying once the development is approved, otherwise council can vary the plans and you can end up with a property that isn’t quite what you expected,” says Mr Rossetto.
“Get a list of projects the developer, or builder, has completed to get a sense of their workmanship. Check the builder’s reputation, credentials and history. Try and get access to some of the projects to get an idea of the standard of finish you can expect.
“Likewise, deal with an agent who has experience selling off-the plan properties as they can guide you through the process.” Mr Rossetto has sold 200 properties off-the-plan in the last couple of years alone.
If an off-the plan contract comes with a sunset clause, make sure it’s long enough, advises Mr Rossetto. “There was a change of legislation late last year to protect buyers. Some developers were going over the sunset clause, then refunding purchaser deposits and then reselling the apartments at higher prices because the market had gone up,” he says.
“Developers can no longer do this under the terms of the new legislation.”
Mr Rossetto advises buyers to buy into an off-the-plan development early to enable them to attempt to negotiate 5% deposits. “Once a developer has accepted about a third of the deposits from buyers at 5%, the banks will want to see bigger deposits to cover their funding of the building. They don’t really recognise 5% as sufficient security.”
Breakout: Tips for buying off-the-plan
- Try and wait for the development to be approved before buying property off-the-plan
- Check the builder’s reputation, credentials and history
- Liaise with a real estate agent with experience selling off-the plan properties
- Check for a sunset clause and its terms
For further media information contact:
Angus Raine, Executive Chairman, Raine & Horne on 0409 920 697
Andrew Harrington, National Communication Manager, Raine & Horne on 02 9258 5400