Professionals Real Estate A 17.1% surge in the median price of home units and apartments over the past year was seen in REIWA figures for the March 2010 quarter.
Purchasing an apartment -off the plan- is often a favoured option for buyers, one which will become more popular over the coming year with rises in building costs and prices of established apartments, notes David Hobbs, CEO of Professionals Real Estate Group. Buying off the plan is particularly attractive as the buyer can secure the property with a relatively small deposit and lock in building costs well in advance of the developments completion.
The following points should be taken into account when considering buying an apartment off the plan;
- Location, location, location is paramount when buying a property off the plan. If the complex is located on a busy road without any nearby facilities then capital growth could be limited.
- Check the future supply of other new apartment developments in the local area as this will determine the scarcity value of the property.
- Check the selling price of similar homes in the area that have recently sold. This will give an indication of the true market value of an -off the plan- or new apartment.
- The physical size of the property is important as more spacious apartments are often easier to resell than homes with limited space.
- If the developer has recently constructed a similar type of property, ask for a viewing to get an idea of the quality and finish you might expect from them. In particular, check the size of bedrooms as buyers are increasingly looking for larger bedroom space.
- Ensure the product you see in brochures during the marketing programme will be reflected in the finished product. It can be a good idea to check with previous clients of the developer to find out if they were happy with the finished product. For extra peace of mind, ask as many questions of the developer as you feel necessary prior to committing to the purchase.
- Take the plans of the development and go -on site- if possible to determine the potential views of your property. If you are buying an inner city property, river views, for example, can add thousands of dollars to the value of the property. However, if the apartment is facing other buildings, then the resale value of the property may not be as great.
- Make yourself fully aware of the layout of the property when reviewing plans. Look for issues such as the size and location of windows and the entrance to the property, as all of these items can have an impact on attracting potential tenants and future buyers.
- Check the small print of the contract to ensure that you are protected against any price rises in construction costs.
- You should also check there are no clauses allowing the developer to vary the construction of the development. Simple issues such as small changes to the size of the balcony may have a major impact on the value of the property.
For further information on buying a property -off the plan- in your area, contact your local Professionals office.
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