Buying off the plan

Since the state government released its Directions 2031 planning policy, local governments have grappled with planning their cities and towns in a manner that emphasises infill development rather than urban sprawl. This is no easy task (take, for example, the community reaction to the City of Subiaco’s planning policies) given our proclivity for a back yard of our own.

However, in-fill we must. Thankfully, there remains masses of underutilised land in and around the metropolitan area that make ideal higher density infill sites; closed schools, disused road reserves, failing small scale commercial centres, ex-industrial land, excess recreational reserve areas, Crown land, etc.

In-fill development is progressing and in and around Fremantle more rapidly than in other places. The eastern entry to the city has several new apartment buildings, South Beach has plentiful apartment choices with more to come, Leighton Beach, North Fremantle’s ‘Taskers’, the ex-medical site on Arundel Street, Little Lane, Montreal Commons, Terrace Green, the old power station, the Knutsford precinct and a host of others are all under development.

These projects give buyers an opportunity to buy a property off the plan. When considering buying such a property it is worth being especially vigilant in ensuring the apartment you choose will turn out the way you expect it to upon completion. Usefully, most developers will provide detailed specification lists so you are able to ensure you get what you’re paying for.

Developers often require a proportion of ‘pre-sales’ before the development commences in order to secure the funding necessary to commence the building. A buyer’s deposit and signed contract gives the financier the necessary comfort to lend the developer the money needed to complete the project. Sometimes, especially in slow markets, insufficient pre-sales means the development fails to progress. On other occasions, in a strong market, like the one we’re in now, pre-sales are plentiful, building commences and upon completion the buyer benefits from the value growth in their new asset.

The sale contracts for these off the plan purchases are substantial, prepared by lawyers and are relatively complex. It is essential that buyers, especially inexperienced first-home buyers, thoroughly read the contract before committing, and obtain some independent advice if necessary. The selling agent is normally not able to advise you in this regard.

Given the need for greater infill development to counter urban sprawl, buying an off the plan apartment for either investment, down-sizing or first home buying reasons can deliver a great inner-urban lifestyle opportunity.

With rents and property values on the rise, now is as good a time as any to seriously consider an off-plan purchase.