Purchasing off-plan allows you to buy at discounted prices. Since the property is still in the pre-construction phase or in the early stages of construction, developers understand that buyers cannot physically see the property. Consequently, they use lower prices to attract buyers. As construction progresses, the property’s value begins to rise, so early investors will invariably see the greatest returns.

Purchasing early allows the buyer to choose the most sought after properties in any given development. The best units usually offer higher capital appreciation in the shortest time frame and can often command the greatest rental incomes.

Typically the buyer will secure a property with only a 10% deposit (into a trust account), while the balance of the purchase price is payable upon completion.

If you purchase off-plan or in the early stages of construction, you typically have a deferred settlement, ranging from 12 to 24 months into the future. In a rising market, you are purchasing at today’s prices in anticipation of higher prices in the future. The deferred settlement allows you to experience capital appreciation without a mortgage payment (or paying the entire purchase price) before you legally own the property.

Foreign investors cannot purchase an existing property in Australia without Foreign Investor Review Board (FIRB) approval. However, a foreign investor CAN purchase properties off-plan if the FIRB has approved the development for foreign investors. And most new developments are approved for up to 50% foreign ownership.

Off-plan purchases qualify for significant tax savings from depreciation. Generally, off-plan buying offers savings that are greater than that of an equivalent existing building. (Consult an accountant for tax advice).