My Real Estate Mate summer reading series: Buying off the plan - the first move
Time is of essence! Have you ever enquired for an apartment project on the Internet, only to discover by the time you speak to the real estate agent - or visit the display suite - the project is almost sold out?
Apartment Register ensures our client’s receive first priority pick in new off the plan developments prior to public launch. Having said that, you need to be organised with a clearly defined apartment selection criteria and understanding of your financial capacity, so you will be able to ascertain a development's suitability to make an informed purchase decision.
When searching, many purchasers search for a property first, find an apartment they would like to buy and then go to the bank, only to find out the price is out of their budget. Your bank will be able to give an indication - based on the amount of money saved and your income - of the price point you can realistically afford. Keep in mind your health, lifestyle and spending patterns.
To purchase an off the plan apartment, you are required to pay a 10% cash deposit and sign a contract of sale. The remaining 90% of the purchase price is paid at settlement; that is, on completion of construction and certificate of occupancy.
If you are looking at buying a $450,000 apartment, you would need to have $45,000 (for the 10% deposit) and pay the remaining 90% or $405,000 at settlement, which is typically 18 months to two years from commencing construction.
Once you have a budget, you can determine your apartment selection criteria. Everyone’s position is different, it is normal to turn to family and friends for advice; however if they don’t own a property they may not be aware of all that is involved in purchasing a new off the plan apartment, nor they are in your current lifestyle and income bracket or have the amount of savings you do.
Remember, it will be one of your largest lifetime decisions, it needs to work for you, not your friends and family.
Your suburb location and size of the apartment is the main price point driver. Keep in mind your first choice suburb to live in may not be in your budget, however the surrounding area suburbs can be a good alternative.
"Location Leap Frog" is the term we use for wanting to live in a location that is tightly held; the zoning or council restrictions may limit building apartments due to height constraints, and therefore may not allow for apartment development which offers limited opportunity to buy in these areas.
At Apartment Register, we have many enquiries for new off the plan apartments in Albert Park and Middle Park, both of which are very tightly held and low-rise suburbs, so you would need to Leap Frog to suburbs within the area, such as South Melbourne or Fishermans Bend.
Do you require a 1, 2 or 3 bedroom apartment? Internal sizes of apartments vary and are calculated per square metre (per sqm) basis, the terrace or balcony is known as external space and is also measured in square metres. The price of an apartment is reflected on the total internal size.
The size guide below is general and will vary on how many bathrooms or study you require:
- 1 bedroom = 42sqm to 50sqm
- 2 bedroom = 56sqm to 72sqm
- 3 bedroom = 75sqm to 100sqm+
In keeping with the mathematics theme, our next article in the Apartment Register summer reading series will touch on rental yield and depreciation.
Feel free to contact My Real Estate Mate through Apartment Register on Urban.com.au and we will be in contact with you straight away.
Cameron Clarke is licensed real estate agent and managing director of My Real Estate Mate and Apartment Register; a joint venture partner of Alamar AV Communications Pty Ltd, publisher of Urban.com.au. Each Saturday over summer Cameron will provide provide commentary and tips on all things apartments.
Cameron's published commentary is not designed to be taken as financial advice and should you wish to register with Apartment Register, Urban.com.au strongly recommends registrants consider their financial position and do their own research before entering into contracts for sale.
