The pros and Cons of Buying ‘off the plan’

Builders often raise capital for their development by selling units or townhouses before they are built. This can be a great way for buyers to get a reduced price and even make a capital gain before settlement. However, it is not risk free. After all, the property market can move down as well as up, so you could end up losing money.

There is also a chance you may not end up with what you intended. For instance, recently a Sydney investor bought an apartment ‘off the plan’ after the agent promised 180-degree water views. When the complex was finished the buyer found a wall obstructed his view altogether. He argued that the contract for sale was void and asked for his deposit back. The builders refused.

The buyer took his case all the way to the NSW Court of Appeal, which ruled in his favour. It found that he had relied on the agent’s misrepresentation when deciding to buy, so the contract was void. It ordered the builders to return the buyer’s deposit.