The main advantage of buying off-plan housing is to buy at the current house price, but the price is to pay before the house is completed. If you choose properly, you buy an off-plan apartment or townhouse at the so-called market price, which is likely to have appreciated in value when the property is completed.
off-the-plan
Experienced home buyers know to buy wisely and spend time and energy to successfully manage the property. To avoid costly mistakes, Wanjia recommends that you always pay attention to the following issues. In particular, select uncompleted properties as investment properties.
Discover value
Before buying a house, it is wise to choose an independent valuation of a bank. This is the most effective way to understand whether the price is reasonable. Direct payment for off-the-plan (OTP, Off-the-Plan) is not easy, but prospective buyers should try to do like a valuer.
Understand how value works, and compare unit prices with comparable unit prices sold nearby. Don’t believe what those who sell development projects say. You need third-party information to look up data from companies like Australian Property Inspection Agency (APM), RPData and SQMResearch.
- Demand
If you buy an apartment, the value-added factors are: good location, spacious bedroom, balcony, parking space, good lighting, and storage space. Factors that may depreciate are: high property fees, swimming pools, gyms and doorman services.
It is recommended to visit the location of the off-plan project to determine the location of the apartment. He said that you have to find out whether the apartment can be bathed in the morning sun and whether there will be other buildings in the future.
- Research
Investors and independent owners should purchase the best-positioned properties within their ability to pay. Those who expand their property portfolio are meticulous about the details, even when listening to expert opinions.
It becomes easier to determine whether a region has value-added potential. She said: “People have a lot of information on hand. You can look at population growth, growth performance, and infrastructure conditions, so you can immediately see whether a district has growth potential.”
- Heed the advice of professional organizations
Generally speaking, the off-plan contract does not stipulate the developer to set the property delivery date. If the developer promises a check-in date, you need a 6-8 week buffer time to prevent construction delays. Because of the stakes involved, off-plan housing contracts are generally highly protected by developers. Before signing a contract, a lawyer checks the contract, and don’t be afraid to propose a contract change. After the initial excitement of buying a house has passed, you often encounter some unsatisfactory things. At this time, the contract can protect you and also prevent you from being tortured by the problem of buying a house. - Delivery risk
Delivery risk is the main problem facing off-plan buyers. For example, if you buy a unit of 520,000 Australian dollars, and the delivery is about to come, your lender’s valuer thinks that this property is only worth 450,000 Australian dollars, and then the risk arises. We have always encountered this problem. Keep in mind that before the completion of the unit, no lender will give exact approval for the purchase of funds. Then, they will commission an independent valuation. Any mortgage approval will be linked to the valuation or purchase price by a certain percentage, whichever is lower. - Fund approval
Successful investors will never buy a house on impulse until they manage the capital problem. You need to get a “principle approved” letter from the lender based on the valuation of the building at completion. At the same time, it also takes time to study how different loans work and how to repay monthly contributions. For investors, making up deposits and reducing tax disputes is more effective than rescheduling mortgages, which is also a wise choice for most independent owners. - Delivery
The delivery date of the off-plan unit is based on the completion date of the building, and the final approval is passed. The property office will issue independent property rights for each unit. The developer wants to recover the funds soon, so the sale contract states that the delivery date is 14 days after the property rights registration. Before buying a house, try to negotiate a reasonable time frame for the delivery of the property. - Credit history
People with multiple properties know their cash flow and will pay bills and other loans in a timely manner. It is recommended to set up an automatic payment function for savings accounts. Prospective lenders should limit the number of times to apply for loans, because loan applications generally appear in the credit file. He said: “Lenders want to work with consumers who have good credit and live within their ability. - Space and interior
Consider the unit area. Off-plan houses usually have smaller furniture than ordinary real estate, and no room dimensions are drawn. This surprises you when you check in, and the dining table may not be suitable. Be sure to make sure that the off-plan sales are clearly marked. Before paying the deposit, you also need to record the interior and changes in writing. Changes are more common, “Many things we have seen include: data lines, network cables in rooms, and network cables in home theaters.” - Deposit
If you plan to buy off-plan housing, you can save a lot of stamp duty, but some people forget this. In Victoria, stamp duty is calculated based on the percentage of construction completed at the time of purchase. This means that if you buy a property before construction begins, you can save a lot of deposits. Investors also need to repeatedly confirm any “indicative” depreciation plan, which will ensure that they will receive full tax deductions and exemptions in the case of high-quality buildings and facilities. Let tax collectors pay as much as they can invest in real estate, absolutely choose to buy an apartment instead of a villa, and buying an apartment can get half of the tax relief. - Uncompleted area and house area
Many uncompleted buildings belong to high-density apartment buildings, so area selection is also important. Because banks usually have quota restrictions in the corresponding areas, if the bank you choose has already reached its quota for an uncompleted project, the bank will not be able to accept its property as a mortgage or lower the valuation of the house to control its own risk.
The area of the house is also very important, usually under 40 square meters (living area, excluding balconies, garages and storage rooms). Most banks are reluctant to accept them as mortgages, and few banks can accept 60% as commercial loans. LVR. 50 square meters is usually a threshold, some banks are 45 square meters, and it is necessary to determine whether the bank has restrictions according to the postcode of uncompleted buildings.
We recommend contacting MHL Broker at least 3 months in advance. We will help you make judgments, determine acceptable banks, and make adequate communication to ensure that the house can be settled on time and smoothly. This includes customers who purchase first-home properties (FHOG) through the purchase of uncompleted properties, customers who need to receive subsidy funds when applying for Settle through the bank, and they must prepare in advance. After the Transfer of Land has been registered, our Broker will help you apply through the bank. .
We will make arrangements for valuation based on experience and regional judgment, so as to avoid the situation where valuation in a bank has problems and cannot continue. Eventually you will get the best off-the-plan home loan.
Advantages of investing in uncompleted properties
- The leverage advantage is obvious, and investors have a buffer period to prepare the balance:
When buying a flat to sign a contract, investors only need to pay a deposit of 10%, and the remaining balance can be paid after the house is completed, or choose a loan (usually 70-80%, up to 90%) . When buying uncompleted property in Australia, investors do not have to pay any fees other than the deposit before paying the house, and after paying the house, the investor can pay the mortgage fee through income such as rent to relieve the repayment pressure. In the current housing market environment in Sydney, the pre-sale of pre-completed flats is usually one to two years or even three years. Investors can fully prepare the balance during this buffer period, and a series of investment income such as real estate appreciation will not be affected. influences.
- The investment threshold is low and the price advantage is obvious:
Generally speaking, the price of uncompleted properties is getting higher and higher. From the developer’s foundation, to building, to interior decoration, this price is gradually increased, so buying a house is the best investment-using today’s money to buy tomorrow’s value. In some parts of Australia, the law stipulates that stamp duty is levied according to the value of the property on the date of signing the sales contract. However, if you buy a residential property, the contract is usually signed before the property starts. Investors only need to pay the stamp tax levied on the land price. Save the next fee.
- There is a wide range of choices and great value-added potential
Another advantage of buying flats is that customers can freely choose floors and floor plans. For investors, there are sufficient houses in the initial stage of opening, and the choice of house types and floors is wide, which can fully meet their own needs. From the perspective of investment, only in the period of uncompleted sales can you buy a real good apartment and a good floor, and such a property has the most powerful value-added potential. Although investment in uncompleted properties has the above advantages, objectively speaking, any investment will have certain risks, and investment in uncompleted properties is no exception. For investors, these risks can be avoided to the greatest extent by understanding the market and related policies and regulations.
Compared with existing homes, the price of uncompleted properties fluctuates relatively large. Therefore, as an investor, you should make an in-depth understanding of the housing prices of the property and surrounding properties before buying the favorite uncompleted properties, and strive to buy at the most advantageous price. To the house you want. As a professional real estate investment agency, ANZ Investment is definitely a good choice for your consultation. If the developer fails to complete the development due to bankruptcy and other reasons before the development is completed, the investor can get back all of his deposit. In this way, although the investor has no financial losses, it is also a loss because the developer cannot complete the construction and cannot deliver the house, which prevents the investor from obtaining the original expected income. Therefore, it is very important for investors to choose developers with strong background, sufficient funds and good reputation.
