Buying Off the Plan

Since our State Government’s thumping electoral wins and enormous majority in the parliament, they can afford to be bullish on all sorts of policy directives, including planning progression and reform. Coming under fire for failing to meet infill density targets, some local governments have been dismissed by the Minister for Local Government (okay, that wasn’t the entire reasoning for sacking the City of Nedlands Council but it’s a convenient outcome). Increasing density in leafy
western suburbs is hard due to intense NIMBYism as most inner urban Councils will attest given our proclivity for a back yard of our own.

investors are providing rental supply too

However, in-fill we must and the Cook government (or is it the Saffioti / Carey government?) is in the enviable position to push through development that is both contrary to the area’s zoning and lacks the support from the local community. Clearly the Commissioner at WAPC has been briefed. How else can a 680 sqm corner lot in Bateman zoned R20 be approved for a two-lot subdivision after local government rejected it?

In-fill development is progressing and in and around Fremantle, it is progressing 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 McCabb street precinct, the ex-medical site on Arundel Street, Woolstores proposal, TAFE site and Heart of Beaconsfield, 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 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.

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 and there are some good stamp duty exemptions available too. Importantly, investors are providing rental supply too.

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