30/11/01

A Guide to Buying Property Off-the-Plan

The advantages of buying off-the-plan are the opportunity to choose colour and tailor specification to suit purchasers'needs whether as an owner /occupier or as an investor. The purchaser also gains the benefit of the state legislation providing building warranties on brand new residential developments, plus manufacturer's warranties on appliances and the like. Off-the-plan purchasers also can take advantage of Victorian concessional stamp duty savings. Saving typically from $10,000 to $30,000 compared to buying an existing property. Penthouse buyers may save over $100,000.

Emotionally, the appeal of living in a new apartment or home for the first time is an option that is very exciting and rewarding.

Off-the-plan purchasers buy at today's prices fixing the price with a 10% deposit, which is held in a solicitor's trust account, covered by state legislation, with settlement normally being 1 to 2 years in the future. This gives the purchaser more time to plan their financial affairs prior to settlement.

The disadvantages of buying off-the-plan are that the purchaser cannot see the exact dwelling they are purchasing and unless the developer has display apartments in previously completed projects they will only be able to see representations in the developer's marketing suite. Central Equity has been selling brand new apartments for many years, and has been successful in helping potential purchasers to visualise their future apartment - people are always impressed seeing the 'virtual' model of the development, kitchen and bathroom layouts, views, facilities, colour selections and range of floor plans at the developer's marketing suite. You can see for yourself and inspect the spectacular new marketing suite just opened this month, for new services and facilities from Central Equity, on City Road at the corner of Balston Street, Southbank (Melway: 2F D10). Plenty to see with information and early preview on a new release coming soon.

Also if you require immediate accommodation then buying off-the-plan will not be suitable. Some developers, such as Central Equity, have rental purchase plans that can assist in this area.

In terms of living space apartment style living is, for most residents, a change. In most cases people living in detached homes will often admit that many of the formal living areas of their home are rarely used and there is significant wasted space in passage ways and inefficient design. Most typical apartments are efficiently designed with a large living area, often larger than any single living area in an established home and therefore people find apartment living an easily maintained, appealing alternative. There is no doubt that people living in apartments spend more time out of the home taking advantage of what inner Melbourne has to offer. Also the major developers, such as Central Equity, will provide exceptional facilities including indoor pools, tennis court, gymnasium, garden courtyards and BBQ areas. These facilities will vary from project to project.

In terms of display apartments, and we can only speak on behalf of Central Equity, our furnished display apartments are in very recently completed developments and give a good indication of the style of development and facilities currently being offered, but of course each project will have it's own attributes and specifications which are regularly reviewed and updated. Central Equity has brand new fully furnished display apartments, 'The Capri at Central Gardens', open for inspection this Saturday and Sunday, 12 Ð 5pm, at 38 Bank Street, South Melbourne (Melway: 2K G1).

The key points that people need to question when looking for an apartment normally include the following: Budget., bedroom accommodation, specification of the apartment, fit-out of the development, including facilities as mentioned above, car-parking, security, technology, level in the building, aspect, views and completion time. Another key question is the developers track record and ability to deliver as promised.

In terms of the purchaser understanding the dimensions of the plan, some developers such as Central Equity, have designers available for the purchasers to discuss dimensions, layout and future furnishing of the apartment. Natural light and traffic flow are important issues to residents. Details such as room dimensions should be provided so that the purchaser can actually assess the spaces that are being provided. In some cases dimensions are not provided, or in the case of a bedroom the dimension is given from the back of the built-in wardrobe to the opposing wall, rather than from the front of the wardrobe to the opposing wall, which actually give the trafficable room dimension.

Often purchasers of apartments will buy into large developments where the developer has no proposed maintenance organization or regime in place at the time of purchase. Certainly looking after some of the major developments that are being constructed, for example on Southbank, the maintenance of the common areas, pool, gym, tennis court, gardens, carparking and cleaning of windows is very important in preserving and adding value to the apartment purchased. Consequently, Central Equity established a subsidiary company, Melbourne Inner City Management, to provide these one-stop shop services to ensure that residents enjoy their new inner city lifestyle.

In terms of furnishings of apartments, if the purchaser is an investor, the furniture is provided, in most cases, by the tenant. If the purchaser is an owner/occupier then often the opportunity of moving into an apartment provides an excuse to update their furnishings. Although if the purchaser is an empty nester or baby boomer, some favourite pieces may be retained. In most Central Equity developments today lockable storage in the carparking levels is an available option to residents or in some cases may be included with the carparking.

Brand new apartments, typically have large windows and balconies which receive comments from purchasers who say how light and bright the apartments are compared to older homes. Also as mentioned earlier, the large living areas and minimal passage ways certainly suit most inner city dwellers lifestyle.

In terms of gardening, with podium style developments, there are a number of apartments provided where large patios and rooftop terraces are included on title. These areas can feature planting in tubs and are appealing to inner city residents with 'green thumbs'. In some developments where there are garden courtyards in the common areas, some residents take the opportunity of planting annuals and sharing in the pleasure of these spaces.

As Melbourne is known as the "Garden State", inner city residents have easy access to large parks and gardens and in the case of the Royal Botanic Gardens can become actively involved in some of the programs offered.

In the case of pets, owner/occupiers are normally allowed to have pets as long as they are not a nuisance to fellow residents. Normally tenants are not allowed to have pets.

Finally, in terms of maintenance of older buildings and increases in body corporate fees, the best thing for a purchaser to do is to look at the developer's past track record and inspect for themselves older developments and see the state of maintenance in terms of the building, common areas and particularly gardens. The body corporate costs should be available at time of purchase and the property management company should be able to be asked what level of increases have occurred in previous similar developments. Body Corporate Fees that are too low should be investigated to ensure that the figures are not being misrepresented as an incentive at the time of purchase. If you are buying brand new, then obviously major maintenance in the earlier period will be minimal.