In the ultra-competitive property market in the Lower North Shore, there is a substantial shortage of those perfect pre-built properties. A solution worth considering is off-the-plan properties.
Let’s get the obvious criticism out of the way first. I have a bias towards new apartments and townhouse over existing dwellings. I work in projects (residential new builds) and sell stock off-the-plan, meaning the building hasn’t yet been fully or partially constructed when the buyers make their purchase. Now that the disclosure is out of the way, let me state my case.
More often than not when buyers are looking for their next property, they are looking for their home for the next 15 years. Many want to buy properties that they can see or move into straight away. However, in the Lower North Shore’s ultra-competitive property market, there’s a real shortage of those ideal properties. Off-the-plan properties can be the solution.
One thing that most of my buyers have in common is that they want to stay local and do not want to leave the Lower North Shore. The lack of established stock, particularly in the class of luxury apartments and townhouses in our area means “off-the-plan” is providing incredible opportunities for both owner occupiers and investors.
Prestige is always a factor in our market. By this, I mean beautiful living spaces, welcoming outdoor entertaining areas, opulent kitchens and ocean views are high on the list for potential buyers.
The demand for high-end apartments with house-like proportions considerably outweighs the supply. Purchasing a property in a luxury off-the-plan project gives owner occupiers the opportunity to lock in their future home in the local area they already love. There is the added benefit of not having to deal with the tense competition in the established market.
Interestingly, the supply of new luxury apartments is starting to further tighten. Knight Frank forecasts the number of new prime apartments to be built in the next three years is set to fall by 39 per cent. This will further fuel future property prices to new heights for today’s off-the-plan buyers.
In this unprecedented property market, home owners have experienced exponential capital gains. According to PropTrak, in the last 12 months to 28 February, apartments in Mosman for example have grown 20% in price.
The latest Pain and Gain report from Core Logic showed that 96 per cent of the properties homes that traded changed hands for more than the sellers paid for them, with the average seller in Mosman netting profit of more than $900,000 from their sales. When purchasing off-the-plan, by the time the property has settled, buyers often pocket instant capital growth. Purchasers lock in a fixed price with the developer and enjoy growth in the market whilst the property is being constructed
While home values are soaring, many buyers are taking advantage of the buoyant property market and capitalising on increased equity of their current property as a deposit. Luxury apartment values should continue to catapult in the coming years and locking in a cheaper price point for an off-market purchase should keep you ahead of the game. It is typical that off-the-plan sales require only a 10 per cent deposit, paid when you sign the contract. This type of property purchase gives you extra time to save funds until the property is built. The balance of the purchase is due on completion.
The high-end real-estate projects that my team and I specialise in have already obtained DA approval and take up 18 to 24 months to complete. This is extremely valuable as whether you’re downsizing or upgrading, off-the-plan projects give you ample time to prepare your existing home for sale.
Developers these days are really pushing the envelope. Off-the-plan apartments are contemporary masterpieces replete with top-end finishes and five-star amenities. Think concierge services, rooftop retreat, infinity pools, tennis courts, entertaining areas including restaurant-quality dining set-ups, wine cellars, bars, libraries and fireplaces. One we’re selling even has a private theatre and a golf driving range simulator.
In 2019 The NSW Department of Fair Trading and The Office of The Registrar General changed legislation, giving consumers far more protection when buying off the plan. The legislation gives consumers far more rights within the off-the-plan purchasing process and ensures that developers are accountable to deliver exactly what is promised to customers.
Developers must lodge a bond of 2% of the construction contract with Dept Fair Trading for a period of 2 years post completion of construction. Certifiers are being far more stringent on builders and developers to ensure compliance on every level and the introduction of The NSW Building Commissioner and his team ensures construction throughout the state is held to a higher standard of quality.
The implementation of new legislation and initiatives by the NSW Government are of great benefit keeping the builders and developers accountable and providing consumers greater protection.
Whether your strategy is to build your property portfolio or downsize in style, or as we like to call it “reluxing”, off-the-plan luxury apartments and townhouses are full of opportunities.
If you have any questions or would like to know more about buying off-the-plan, speak with Tim.