Off the plan Properties are back on Track!

The Australian Financial Review (AFR) has indicated that off-the-plan (OTP) is back and flying high.

Purchasing off-the-plan means buyers are paying for a property that hasn’t been built yet.

At this point, during a rising market, OTPs are popular as there is a potential that the property price would rise, generating capital gain.

The report has suggested that property prices in bigger cities, such as Melbourne, have increased by 2.4% in houses, and 1.4% in units.

Key benefits of purchasing OTPs:

1. Prices of existing properties are similar to the ones of OTPs now. Using the concept of leverage, you are able to gain higher returns in the next year or 2. The key is, for OTPs, you pay a lower deposit to enjoy potential higher growth.

2. There are more options available. With OTPs being brand new, you may select ones with or without facilities (etc. gym, pool, yoga room and so on), and other choices of which direction you’d like the unit to be facing, such as garden or city view.

3. A lot more options. Lower financial stress, as you only need to place a 10% deposit to secure the OTP. It gives you another year or 2 until the settlement of the property, giving you more time to prepare the remaining finances.

4. If you purchase an existing property during a pandemic, chances are you may not be able to rent it out easily. In 2 years time, when life is back to normal, and international students and professionals return, you can just imagine how much the rent would rise.

Source: Australian Financial Review