The real estate market has remained relatively steady throughout the COVID-19 crisis, and many property experts are saying that there has never been a better time to buy.
The off-the-plan and development industry is agile and forward-thinking, having developed virtual inspections and offered appointment-only display suite viewings for many years. Off-the-plan has always provided buyers with a less-stressful, auction free alternative to secure high-quality real estate in sought-after areas, meaning the necessary health and safety measures put in place to protect Australian against COVID-19 have not drastically affected the off-the-plan sector.
For these reasons, the industry is the advantageous position to seamlessly continue offering these services to prospective buyers.
Benefits to buying off-the-plan in NSW
Recent stimulus measures, including the HomeBuilder grant, and record-low interest rates are making it a very affordable time to buy and build. The projected strong recovery of the industry when life inevitably returns to normal will be bolstered by easier access to finance, which is particularly good news for the residential sector in NSW.
It has been predicted that off-shore investment will be down due to COVID-19, lowering competition for local buyers. Improved lending conditions may instill further confidence in those looking to purchase an off-the-plan property over the next few months.
Off-the-plan offers purchases the unique opportunity to put down a fraction of the final cost of their home initially, often with no additional money required for many months. This is a great way for buyers to secure a home now, and not have any financial obligations until the COVID-19 pandemic has passed.
Thanks to new law reforms introduced at the start of 2020 and increased buyer protections, changes to the Sunset Clause and the off-the-plan duty concession and HomeBuilder grant, purchasers can enter into an off-the-plan contract with peace-of-mind, even in these times of uncertainty.
The ability to arrange by-appointment or virtual display suite inspections also provides off-the-plan with unintended advantages during this time.
Recent Law Reforms for off-the-plan in NSW
In order to make sure that all stakeholders in the process maintain the standards of transparency and service that many of the best developers have successfully maintained for years, the NSW state government has introduced new laws aiming to protect and empower buyers entering into an off the plan purchase.
Increased contract transparency
Through the introduction of Disclosure Statements – i.e. a document outlining what the NSW government deems to be the main or more confusing points of the contract after their thorough review – buyers will be able to more easily understand the key points of their contract.
You can view an example of this disclosure statement here. It covers points like the sunset clause (click here for our explanation of how this clause works), if there are any additional fees or charges beyond the deposit and settlement payments, if development approval has been obtained by the developer, expected construction commencement and completion dates, any on-going owners corporation or strata fees, and other such key information.
Notification of changes
Moving forward, if a developer plans to make changes to a ‘material particular’ (meaning an aspect of the development pertaining to the physical construction or appearance of the dwellings), which a buyer can prove would have meant they would not have entered into the initial contract, the contract can be terminated. Alternatively, the buyer can seek compensation of up to 2 percent of the sale price, but if compensation is awarded the contract can no longer be terminated under this new section of the legislation.
This puts more power in the hands of the purchaser, as it can often be nerve-wracking entering into a contract of sale for a home that you are not able to physically inspect. These new Notification of Changes laws aim to provide peace of mind that buyers understand and agree with the end result of the project and receive regular updates throughout the process.
The cooling off period
When purchasing an existing dwelling, the cooling off period is 5 days after signing the contract. This period has now been extended to 10 days for off the plan purchases, which recognises these contracts are often lengthier and more complex than those for existing dwellings.
From the 1st December 2019, all deposits for off the plan purchases must be held in a trust or controlled money account during the contract period. This protects buyers from losing their deposit in the event of the developer’s insolvency.
For more information on these changes, you can visit the NSW Office of the Registrar General website.
Why buy off-the-plan?
Purchasing an off-the-plan home gives you the opportunity to inject your own personal style into a modern, contemporary space that can often be purchased for much less than the median house price for a comparable property in the area, and also means you can often make a more sustainable choice.
Forward thinking developers are creating developments that maintain a key focus on thoughtfully selected materials and impressively high energy ratings, giving owners a unique chance to seamlessly integrate sustainable practices into their everyday lives simply by enjoying their home.
Buying an off-the-plan apartment, townhouse or house and land package does not have to mean conforming to a particular style or aesthetic. Many developers now offer flexible floor-plan options and customisable interiors, so an off-the-plan apartment purchase now provides you with the ability to get creative and have control over the look and feel of your space.
Buying off-the-plan often allows you to save money, meaning you have more in your pocket to enjoy life. With interest rates as low as they currently are and both developers and the government offering incredible incentives, this could be the ideal time to purchase off-the-plan.
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