The property market certainly has a spring in its step with property prices once again showing some encouraging growth, auction clearance rates high and lots of sale contracts coming across our desk.
Penrith is also abuzz with some exciting new developments.
The Royce, a premium over 55s facility in the Penrith Panthers precinct has just welcomed its first residents. We have a number of happy clients who will be moving in shortly.
Stage 2 of the unique East Side Quarter development “Aqua” has hit the market allowing off the plan purchasers to snap up resort-style living in the middle of our great city.
These are just a couple of examples of what is coming so we thought we would take the opportunity to provide our readers with a quick rundown of purchasing off the plan.
When you buy off the plan you are purchasing something that hasn’t been built yet.
The developer will have prepared a plan of what the relevant development will look like, what facilities it will have, what types of appliances and finishes will be installed and will go to market usually before any soil has been turned.
Some of the benefits of buying off the plan include:
1. You are locking in today’s price but don’t have to pay most of the purchase price until the development is complete, so if the value of the property goes up you get the benefit.
2. There is usually an extended period of time between when you sign contracts and when the project will be complete, meaning you have more time to save money to contribute to the purchase price.
3. You are getting a brand new property as opposed to purchasing a pre-existing home that may have pre-existing problems.
Like any property transaction, however there is always a flipside and things you need to be careful of:
1. You might get the upside of any capital growth, but you also get the downside. If the property goes down in value between signing contracts and settlement you still have to pay the purchase price you agreed to at the beginning.
2. There will be a delay between signing contracts and getting into your new home so you need to be patient.
3. There is a risk that the developer will need to make some changes to the plan as the project is being built so the end product might not be exactly what you imagined.
4. You will not be able to get unconditional loan approval until the property is built so you need to make sure you do your financial due diligence before entering into an off the plan contract.
The key to buying off the plan is to make sure the Contract of Sale is balanced.
All transactions have risk, however if the sale contract provides certainty around the product the developer has to deliver and at the same time gives the developer a level of flexibility that takes into account things like unexpected building delays and the like then off the plan projects are often a success.
We have lots of experience helping clients with all sorts of off the plan developments. Some of the local developments we have assisted clients in include Glenmore Ridge and Mulgoa Rise, Waterside and Jordan Springs, Caddens, Home on High, City Vista, East-Side Quarter, The Royce, and many more.
For expert advice on off the plan purchasing, contact one of our solicitors today on 4704 9991.
Daniel McKinnon
Since graduating with two degrees in Law and Commerce from the University of Wollongong, Daniel’s spent over ten years solving a wide range of legal problems for the people of Western Sydney.