Will stamp duty changes mean more homebuyers buy off the plan?- Buyer Beware

By Janet Spencer

Changes to stamp duty rates from the 1st of July, 2017 will impact the property market in my opinion.  From that date forward home buyers are being tempted into the off the plan market by reductions in stamp duty payable that will not apply for investors.  Investors will no longer benefit from reduced stamp duty on purchase.  Only home buyers will.    But buyer beware!  

Buying apartments can be risky.  As professional Buyer’s Agents we have very strict asset selection criteria and for us to recommend an apartment to a client, the property must pass rigorous tests.

Some things to think about before buying an apartment –

• How many apartments in total are in the building and what are you comfortable with?
  Do you prefer a boutique development or do you not mind if you’re sharing a building with 500 other owner occupiers and tenants?
• The location of the building. Is it on a main road or in a quieter area?
• What is the parking situation? Is there traditional garaging, carport or car stackers? Remember not all cars fit into a stacker. Is the car park entrance and exit of the building well thought out? Will there be bottlenecks, is there a good turning circle out of your car spot? Is there ample parking options for visitors?
• What are the building’s amenities and how do they affect the Owner’s Corporation fees that you’ll have to pay each year?
• What is the position of the apartment? Which direction does it face? Will you get plenty of natural light or not much at all? Who’s looking into your windows and will there be a new development going up and restricting your view in future?
• What is the internal measurement of the apartment. Different financial lenders have different lending criteria. Some lenders won’t lend for apartments smaller than 40 m2 some won’t lend for less than 50m2 apartments. Know what your lending restrictions are.
• Are there or will there be shops on ground level? Do you have lender approval to buy in a mixed use building?
• Please remember is that your lender’s rules will apply at settlement and not at purchase. What this means is that if your lender gives you approval for an off the plan property, two years later when the property is ready to settle, the lending rules may be different and you may no longer qualify for a loan or a loan of the same value as was initially expected. A lot of foreign investors were caught out by changes to lending rules in 2016 and have failed to settle.

There are many more factors we look at as Buyer’s Agents. When sourcing high quality apartments for our clients we really work hard and “kiss a lot of frogs” before we “find the prince”.

You can read more about problems off the plan buyers face here.

If you need help purchasing an apartment please get a good agent on your side who will work in your best interest.  A property purchase is a big investment, don’t go it alone.

For independent advice on buying or selling real estate, contact Janet Spencer at Buyer Solutions +61 3 9816 8555 or email jspencer@buyersolutions.com.au

Buyers Agent, Buying property, First home buyers, Home buying, Housing Affordability, Investment property

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