The Benefits of Buying Off-the-Plan

by Greg on February 19, 2015

Buying a home off the plan

Chinese buyers are currently swooping on Australia’s housing bargains to cash in on the next property boom. Chinese developers are swooping in on off the plan properties and apartments. So great is the international demand – fuelled by a falling Aussie dollar and Beijing’s ban on buying more than one property – that some developers are now marketing new units exclusively to offshore buyers. These investors are swayed by the potential capital gains offered in the Australian property market and also by any favourable differences in Forex rates between the Australian Dollar and their home currencies.

Selling properties to overseas investors is big business in Australia. The Foreign Investment Review Board approved $51.9 billion worth of investment into the real estate sector last year, and $19.7 billion was poured into the residential real estate sector.

There is a whole range of players in the housing sector, from big property developers to suburban real estate agents, benefiting from the foreign appetite for Australian bricks and mortar. The booming sector has also inspired many internet entrepreneurs who are keen to sell Australian properties – mostly off-the-plan new apartments – to overseas buyers.

Under Australia’s foreign investment rules, non-citizens are restricted to buying new or off-the-plan properties. Only Australian citizens, permanent residents or temporary resident visa holders can buy established – or second-hand – homes. This has been reinforced because of the growing concerns about the impact of foreign buyers, particular cash-rich investors from China, who have poured in billions of dollars into the local market and fuelled soaring housing prices.

Even though Australia’s foreign investment rules ban foreigners from buying established homes, developers can sell half their properties to foreign investors before they are built – off the plan. So while Chinese buyers have fuelled the top-end real estate revival, they are also courting controversy, with some local house hunters complaining they are being priced out by foreigners who have no intention of living in their new properties. The figures are showing that offshore buyers for off-the-plan apartments and industrial development sites had doubled over the past six months.

Why Is Buying Off-The-Plan Beneficial?

Off-the-plan purchases have a lot of the advantages including the stamp duty payable often being reduced because the property is not yet completed. The Foreign Investment Review Board (FIRB) also allows an overseas investor to purchase an off-the-plan property, where they can’t purchase an established property.

Perhaps one of the biggest advantages is that there is the potential to secure the property without putting any money down. Some developers accept deposit bonds to cover the deposit instead of having to use your own cash. If the property is not completed for a couple of years, this is a much cheaper option and allows investors the flexibility of using their cash for something else.

The Chinese are not looking at investing in “trophy homes” but are looking for “solid investments” or apartments which are off the plan in Australia. It is recorded that Asian buyers are currently purchasing 60 per cent of units being sold off-the-plan in big developments. Australia has become such a popular investment location for investors as it is said to be a neutral country with a strong government, reliable currency and stable marketplace.

If you require more information regarding investing in off the plan properties, iBuyNew is Australia’s number one destination for off the plan property purchases. Whether an investor is looking for apartments, townhouses or house and land packages, iBuyNew has the nation covered with a huge selection of new property for sale.

 

by Mark Mendel

Mark Mendel is the founder and CEO of iBuyNew, Australia’s number one online new property group.

{ 1 comment… read it below or add one }

E Conveyancing Brisbane February 21, 2015 at 9:52 pm

It is incredible and informative knowledge…

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