Buying a house, apartment or townhouse ‘off-the-plan’ means signing a contract to buy a property prior to it being built.

When buying a property off-the-plan, the purchase decision is based on building plans, elevations and renders, as well as the location itself.

In most cases, purchasers will put down an initial 5-10% deposit, with the balance of funds not due until construction is completed.

Advantages of Buying Off-the-Plan

Disadvantages of Buying Off-the Plan

Buying Land and House, and Land Packages

In the eyes of lenders, land and house, and land packages can often fall into the same category as an off-the-plan purchase.

In recent years there many people have been buying land and seeing strong growth in a short period of time. This can be advantageous, as when the buildings are finally standing and valued, the properties have already seen a significant upside. This is one way that many people have been able to save paying Lenders Mortgage Insurance (LMI).

However, it is important to note that this is considered a valuation risk, as those same properties can come in short with their valuations if you buy at the wrong time. This means that you will need to contribute more funds if the value of that land has fallen between the purchase of the land and completion of the house.

However, most of the banks will accept the market value of the property if the valuation for off-the-plan/land sales is done after 12 months.