New apartment developments are on the rise, as Australians become more used to the idea of strata living; especially when it means they can live closer to the CBD. Young buyers are also attracted to brand new properties in some of the eastern states, where newly constructed homes are the only ones still eligible for first home owner grants and other incentives.

Many of the new developments offer buyers the chance to buy off the plan; or before the block has been built. There are a number of advantages to this kind of purchase, but there are also some pitfalls; so it pays to be wary of hidden traps and any terms and conditions you may have overlooked before taking the plunge and buying not just sight unseen, but building unconstructed.

First, let’s take a look at some of the brighter factors involved. 

After paying a holding deposit, you usually don’t settle until the property is completed, which can be a couple of years. There is a lot less pressure involved, knowing that you have more saving time to build a good mortgage buffer at the beginning of your repayment period, and also for up front extras like stamp duty.

Secondly, you have secured your new property at ‘today’s price’, but a rising market will mean that by the time you settle, you may have already made some equity.

Finally, while your choices are more limited than a new house and land, you get to have some input into the building process and choose certain aspects of the layout of your apartment. If you get in early, you can also choose where in the building you want it to be located.

Now to look at some of the negatives.


Just as a long settlement date is great in a rising market; it’s the opposite when a market is declining.

One example was when a number of property markets crashed after the GFC, especially in holiday locations such as the Gold Coast. Many people bought off the plan only to find their apartments were worth much less by the time they were completed. This meant if they had to sell, they couldn’t repay the bank.

Because of this, it can be hard to secure finance from some banks to borrow for an off the plan purchase. Some simply won’t lend to people, while all are certainly more cautious as a result of the events of 2008 and 2009.

It also pays to remember that the finished product may not live up to your expectations. Artist’s impressions are designed to make sales, not necessarily to capture the most realistic outcome for your property. It may look smaller, or just plain weird once completed. That’s when you realize that walking through an established property at least means there are no obvious surprises when the time comes to move in.

An extra risk is that the development may never be completed. Construction companies often rely largely on finance raised from pre-purchases to complete construction and if too many hurdles happen along the way, it could spell disaster. 

So, before buying off the plan, research the market to make sure prices have not peaked; ensure the developer has a long and reliable history; and remember also to shop around for the right lender.


Tim McIntyre is the senior real estate reporter for the Daily Telegraph and
Over the past decade, he has attained widespread knowledge of Australia’s many unique property markets and is an authority on all things buying, selling and investing.
His commentary appears every Saturday in the Daily Telegraph Real Estate lift out, as well as online at

Want more? Here's one of our fave moments from Jase & Lauren – they’re always up to something! Weekdays from 6AM on KIIS 101.1!