With the population in Melbourne booming faster than any other city in Australia, it’s not hard to see why there are so many new high-rise apartments and multi-unit developments being built across the city and middle ring suburbs. According to the Australian Bureau of Statistics we are growing by 1,760 people per week, or just under 100,000 people a year. Property developers are cashing in by building multi-level apartments to accommodate this growth in population in once suburban low density suburbs. Doncaster, 15km east of the CBD and Box Hill, 14km east of the CBD are both good examples with Box Hill set to accommodate Melbourne’s tallest high-rise suburban building at 36 storey’s high. Typically bank’s lending criteria require the developer to sell a certain amount of the apartment project before building has even commenced. This means investors and buyers who want to buy a new apartment are faced with having to buy off the plan, a property that hasn’t been built yet. What are some of the items you need to look out for when buying an apartment or townhouse off the plan?
- Reputation, experience and history of the builder – this is crucial to ensure the builder won’t go bankrupt mid development and be unable to finish the build. You need to do your research, ask around, check out their past developments, check with Master Builders Australia and you can even google them to see what has been written about them. If you notice anything dodgy walk away!
- Estimated time to complete – sale contracts for off the plan purchases have a sunset clause, this could allow the builder a lot longer to finish the project than what they tell potential buyers – so be prepared that you may have to wait around for longer than you are originally told
- Layout & natural light – most buyers get caught out on this. You need to visual how the property will actually be once complete. If you struggle with reading plans, physically measure out the size of each room to help you understand what it will be like. Make sure there are adequate windows, is the apartment north facing? These are all items you need to assess prior to buying.
- Body corporate or owner’s corporation fees – if you are buying an apartment or townhouse with shared land or common area you will have to pay a maintenance fee for the upkeep of these areas. Because the property isn’t complete yet typically this fee will be unknown, however you need to be aware that it exists. Ask the developer or selling agent what it is expected to be and why.
- Ensure your views won’t be built out – Often the greatest value attributed to an apartment are its views. So you need to ensure that your views won’t be blocked by another apartment building in the future. Contact the relevant council and check if there are any other approvals of buildings going up around you. Try to select a block that is elevated or on a corner where it would be difficult for another building to block out your view.
These are just a few of the items you need to wary of when buying off the plan. For inexperienced or first home buyers it can be a risky purchase, however if you do your due diligence and get an expert on your side buying off the plan can be a great idea. For more advice or assistance with buying off the plan contact our experienced buyer agents today.