Joanne Ly - 27 Aug, 2020

How digital technology is changing buying off-the-plan

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Buying off the plan has become increasingly popular as new apartment and house dwelling plans are released. Buying off the plan relates to buying properties that have not yet been constructed. These properties can still be advertised for sale with model images and a standard contract.

The COVID-19 pandemic has shifted the power back into developers’ hands, giving them a proactive approach to attracting buyers through video inspections, online auctions and digitally signed contracts. Since developers have the advantage of no physical property to show, they focused on revolutionising their business model to provide seamless digital information for buyers. That way, buyers’ confidence will skyrocket to make a guaranteed purchase. Virtual display suite tours have also become available to deliver the same interactive, in person experience.

couple looking at an off the plan property on the internet

Related: Online Auctions: Buying and Selling Property

What is ‘buying off the plan’?

When buyers are looking for a property to buy off the plan, there is no physical property to inspect. In some cases, construction may not have started, whilst in others, it may have been partially built. Without a house or an apartment to walk through, buyers will base their decision on plans provided by the builders, as well as artistic renderings of how the property might look. In addition to this, there can also be showrooms built to illustrate what it would look like.

When a buyer signs to a property that is off the plan, they commit to a contract just like any other buyer if the property has been completed. However, off the plan buyers have an automatic 10 business day cooling-off period, which is longer than that of an already constructed home (usually 5 business days). Buyers can decide to pull out of the contract during the said cooling off period, but will have to surrender 0.25% of the purchase price.

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Should I buy off the plan?

Buying off the plan comes with its own advantages and disadvantages, so it’s not a clear answer whether or not buying off the plan is right for you. However, you should ask yourself some questions to see what control you have over the property during the build period:

  • Am I able to make changes to the finishes of the property?
  • Can I pick appliances, and floor furnishings (such as floor and wall tiles)?
  • Can I visit the site during construction to check the progress?
  • Am I still able to arrange finance if the building happens to finish earlier or later?
  • Can I on-sell the property during the construction period?
  • What can I do if construction has been altered after I’ve signed the contract?
  • Can the developer make changes to the design without my consent/knowledge?

An off the plan contract rarely ever has a detailed description of the property you are purchasing – because the developer doesn’t want to legally commit to something they don’t know the outcome of. A usual contract consists of copies of the strata plan or preliminary property plans which have been submitted to the council. The brief details are the type and standard of finishes to be used. It’s important to check over these details and ensure you’re satisfied with the level of technicality.

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couple looking at blueprints for off the plan property

How the purchasing process works

The first step to take when purchasing an off the plan property is to do your research. Research not only the property and development plan, but also the area the property is located. Consider growth, trends and whether or not it will suit your lifestyle needs. You will also need to review your developer – their experience, qualifications and any past reviews. Ensure that their financial performance is strong and current projects are all tracking well before committing.

When you have your mind set on a particular property, lodge an expression of interest payment to let the developer know you’re a serious buyer. Once everything is accepted and finalised, a contract of sale will be signed for the purchase. Seek independent legal advice from a conveyancer so that the contract contains all relevant terms for the exchange. You will also need to obtain finance from a lender. Some lenders will require an 80% LVR ratio, whilst others may need to review any pre-approvals they issue at the time you sign the contract. This is because the property value may decline between the time you sign the contract and the property completion date.

What are the advantages?

More time to prepare finances

Properties usually take 1-2 years to complete building when you purchase off the plan, meaning you’ll have the same time to prepare yourself financially. Only a 10% deposit is required upfront, and there are no more payments until the property has finished. In that period, you can start saving without the worry of having to make any mortgage repayments.

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Access to discounts and specials

Almost always when you go to buy an off the plan property, there will be discounts and special deals involved. When it comes to a developer, they want to sell all their properties, otherwise bank’s won’t approve the finance for their development. During the early stages when they’re eager to get as many contracts signed as possible, they can knock off prices off plans (especially if they’re selling higher than similar plans). Other off the plan properties include spending credit, premium finishes and furnishing vouchers.

Property value increasing over time

When you buy off the plan, you agree upon a purchase price before the building is completed. This means that you could potentially pay less for a property than it’s worth at the time you actually move in, as the property market could have increased during the time it took for the developers to finish building. Given how property prices do go up over time, this could be a likely possibility.

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What are the risks involved?

Builder could go bankrupt

If the builder goes bankrupt after you sign the contract, the off the plan development will not be able to be finished. This could potentially mean a loss of one to two valuable years where the deposit money could have been used elsewhere. In some cases, the builder might not even be able to give you the deposit back. It’s important to check if there’s a clause in the contract that restricts deposits if the development doesn’t go ahead, or if you will be reimbursed.

Finishes or designs that weren’t stated

When buying off the plan, there could be a chance you might not receive what you were promised by the developer, or what you had expected the property to be like. This can often happen when developers have financial issues, they will change property finishes to save money. Design changes can also happen due to structural and logistical reasons. If the property is underwhelming, there is little chance to get your deposit back.

Sunset clause expires before property has finished

A sunset clause is a clause within the contract of sale that puts a time limit on the contract’s validity period. If the developer fails to complete the property by the date outlined in the sunset clause, the contract can be declared void and the deposit is returned to the buyer. Although the clause is put in place to protect the buyer from long delays, some developers in recent years have used this to their advantage to run over the time outlined so they can terminate the contract and resell the property for a higher price. Doing thorough research into the company’s reputation is critical to avoid situations like these.

buying off the plan

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State and territory concessions for buying off-the-plan

New South Wales

  • Stamp duty will be abolished or reduced for first home buyers
  • First home buyers may be eligible for a grant of up to $10,000
  • To qualify for first home buyer concession, the total of your property (including land) must be valued at less than $800,000
  • Homes must be brand new


  • You must pay the market value for your property or you will not be eligible for the concession
  • Ineligible First Home Buyer Grant applications may still be eligible for off the plan concessions
  • Purchasers must be over 18 (exception of purchasers who are the guardian of a person with legal disability)
  • Concessions are not available to company or trustee buyers
  • One buyer must live for at least 12 months in the property


  • Home concession is available when buying a second home
  • First home concession is available for first home buyers
  • First home buyers can claim both a First Home Owners’ Grant and FIrst Home Buyer Concession if they meet the requirements


  • If you become eligible for the First Home Owner Grant or the Home Buyer Concession Scheme, and the duty amount is more than $1,000, you can defer your payment.
  • An eligible pensioner who already owns a residential property and is moving to a home more suitable for their needs may be able to get a reduced concession.


  • No concessions are available to first home buyers who build a new home

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Northern Territory:

  • You may be entitled to receive the Principal Place of Residence Rebate of up to $7,000 for any stamp duty paid on a home that is your principal place of residence and that you haven’t claimed a first homeowner discount on
  • A stamp duty concession is given to a senior, pensioner or carer so long as one purchaser is over 60 years of age and a holder of an NT Pensioner card.
  • A stamp duty concession is available to first home buyers
  • Zero stamp duty is available to first home buyers, if the property is priced up to $500,000

South Australia

  • The off the plan concession no longer applies to any contract entered on or after 1st July 2018

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Words by Joanne Ly

If you’re thinking of buying off the plan, the brokers at eChoice are here to help! Contact us today and we’ll find you a competitive mortgage rate.

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