Off-the-Plan Property: Pros, Cons, and Investment Potential
Buying property off the plan has become an increasingly popular option for both home buyers
and investors across Australia. With access to new developments, modern designs, and
potential financial advantages, off-the-plan purchases can be appealing, but they’re not
without risks.
Understanding the benefits, drawbacks, and true investment potential of off-the-plan
property is essential before committing. In this guide, we break down everything you need to
know to decide whether buying off the plan aligns with your property goals.
What Is an Off-the-Plan Property?
An off-the-plan property is purchased before construction is completed, or in some cases,
before construction has even begun. Buyers commit based on architectural plans,
specifications, and artist impressions rather than a finished product.
These properties are commonly found in:
● Apartment developments
● Townhouse projects
● New residential estates
Settlement typically occurs once construction is completed, which can range from several
months to a few years after signing the contract.
The Advantages of Buying Off the Plan
- Lower Initial Financial Outlay
One of the most attractive benefits is the smaller upfront cost. Buyers usually pay a deposit
(often 5–10%) at contract signing, with the remaining balance due at settlement. This allows
time to save, plan finances, or restructure portfolios before completion. - Potential Capital Growth Before Settlement
If the market performs well during the construction period, the property may increase in value
before settlement. This means buyers could secure an asset at today’s price while benefiting
from future market growth. - Stamp Duty Savings
In many states, stamp duty concessions apply to off-the-plan purchases, particularly for
owner-occupiers and first home buyers. These savings can be substantial, depending on the
purchase price and stage of construction. - Brand-New Property Appeal
New builds attract:
● Modern layouts
● Energy-efficient features
● Lower maintenance costs
For investors, this often translates to strong tenant demand, higher-quality tenants, and fewer
repair expenses in the early years. - Strong Depreciation Benefits for Investors
New properties offer significant tax depreciation benefits, including building depreciation and fixtures. These deductions can improve cash flow and enhance overall investment performance.
The Risks and Disadvantages of Buying Off the Plan
While off-the-plan purchases can be rewarding, they require careful consideration.
- Market Fluctuations
Property values can move both ways. If the market declines between contract signing and
settlement, the property may be worth less than the agreed purchase price. - Valuation Risk at Settlement
Lenders will assess the property’s value at settlement not the original contract price. If the
valuation comes in lower, buyers may need to contribute additional funds to complete the
purchase. - Construction Delays
Delays due to weather, labour shortages, or supply chain disruptions are common. These
delays can impact:
● Settlement timelines
● Finance approvals
● Rental income projections - Changes to Design or Specifications
While contracts outline finishes and inclusions, minor changes can occur. Buyers should
carefully review contracts to understand what variations are permitted. - Developer and Builder Risk
The success of an off-the-plan purchase heavily depends on the developer’s experience and
financial stability. Choosing reputable developers with a proven track record is critical.
Investment Potential: Is Off-the-Plan Right for Investors?
Off-the-plan property can be a strong investment when selected strategically.
Key Factors That Influence Investment Performance
Location
Proximity to transport, employment hubs, schools, and amenities remains the most important
driver of long-term growth.
Supply and Demand
Oversupplied areas particularly high-density apartment markets can limit capital growth
and rental performance. Careful market analysis is essential.
Quality of the Development
Well-designed properties with liveable layouts, practical sizes, and quality finishes outperform
poorly planned developments.
Holding Power
Investors should be financially prepared to hold the property through market cycles, rather than
relying on short-term growth.
Off-the-Plan vs Established Property: A Quick Comparison
| Off-the-Plan Property | Established Property |
| Lower upfront costs | Immediate settlement |
| Potential stamp duty savings | Known market value |
| New build depreciation | Higher maintenance |
| Valuation risk at settlement | Less uncertainty |
| Modern features | Established rental history |
Both options can perform well the key is aligning the choice with your strategy, timeframe, and risk tolerance.
Who Is Off-the-Plan Best Suited For?
Off-the-plan property may suit:
- Investors seeking depreciation benefits
- Buyers comfortable with a longer-term outlook
- First home buyers accessing government incentives
- Purchasers wanting modern, low-maintenance properties
It may be less suitable for buyers who:
- Require immediate rental income
- Have limited financial buffers
- Are uncomfortable with market volatility
How Atlas Real Estate Helps Buyers Navigate Off-the-Plan Purchases
At Atlas Real Estate, we take a research-driven and client-focused approach to off-the-plan property.
Our process includes:
- Selecting developments based on location, demand, and long-term fundamentals
- Assessing developer credibility and project feasibility
- Identifying risks before contracts are signed
- Aligning property choices with your financial and lifestyle goals
We believe off-the-plan buying should be strategic not speculative.