Bold move to future-proof your nest egg and buy you freedom

As more Australians chase a new home ownership dream, these tips show why a smaller abode could better protect your interests.

* Brought to you in partnership with Australian Seniors *

A brand new apartment bought off the plan can seem an attractive option to downsizers and empty-nesters. On the plus side, there’s usually only a 10 per cent deposit to pay upfront. And you get a year or two before the building is built to put your finances in order, sell the family house and prepare for a fresh start somewhere shiny and new.

But on the downside, you’re buying something sight unseen, which can be nerve-racking.

“If you’re buying from a reputable developer with a good record and a brand you can trust, there are many advantages,” says Property Council of Australia chief executive Ken Morrison.

Property Council of Australia chief executive Ken Morrison says if you’re buying from a reputable developer with a good record and a brand you can trust, there are many advantages to buying off the plan. Picture: iStock

“If you get in early, at the start of a project, you can also choose something specific to your needs and have the choice of all the apartments that are going to be built.

“The regulatory processes and compliance regimes have recently been strengthened around the country, so people can now approach the decision with much more confidence.”

In the past, buying off the plan has attracted its fair share of controversy.  Defects plagued Sydney’s Mascot Towers and Opal Tower, and the combustible cladding discovered on other blocks, particularly in Melbourne, created a storm of negative publicity.

But with careful vetting and research, and by fixing the price when you put down the deposit, many experts believe you can reap richer returns on completion, plus claim depreciation on the property against your tax bill.DOWNSIZER PARADISE

Tania and Paul Dalla Vecchia left their 73ha sugar cane farm with its massive homestead in Innisfail, Far North Queensland, for a 132 sqm apartment in new Brisbane development Ascot Green. Tania, 55, now works part-time in retail, while Paul, also 55, has a new job with a motorhome company.

Paul and Tania Dalla Vecchia. Picture: Paul A. Broben/ProMedia Photography/supplied.

“We couldn’t be happier,” says Tania of their move into the $1.2 billion redevelopment of the Eagle Farm racing complex. “We bought it because it was a good developer, Mirvac. As soon as we saw the rooftop recreation area and Paul, who loves racing, saw the racetrack, that was it.

“We’re loving our new lifestyle. Paul used to spend eight hours mowing grass every week and working from dawn till dark. Now we have so much time and, with our two kids grown up, we can go out for breakfast, go out for lunch and go out for dinner too. We can do what we like.”

The development has attracted a lot of downsizers buying off the plan, according to Mirvac head of residential Stuart Penklis.

“Ascot is a beautiful suburb and the larger apartments really suit people who are moving out of big homes,” he says.

At Home 2023: Medium Rare partnership/Australian Seniors. Buying off the plan, March 4 issue. Picture: supplied

TICKING THE BOXES

Experts suggest anyone planning to buy off the plan should do all the relevant research. Check the developer and builder, visit past projects and even knock on doors to ask residents about their experience.

“It’s better to pay a premium for an apartment from a reputable developer than be saddled with a defective property,” says Karen Stiles, executive officer of the Owners Corporation Network, the peak body for apartment owners. “You should always visit the site of the development to see what it’s like, and make sure there aren’t plans in place for other buildings that might knock out your views.

“Find out where else the apartments have been sold – be wary of those heavily marketed overseas – and check the prices of similar properties in the same area as the off-the-plan building. You might be able to negotiate on price.”

Stiles also recommends quizzing the agent about quarterly levies, hiring a good solicitor to go through the contract, reading the bylaws and carefully checking the apartment’s layout.

Experts suggest anyone planning to buy off the plan should do all the relevant research. These apartments in Preston made headlines when it was discovered they were covered in combustible cladding. Picture: Ian Currie

LOCATION, LOCATION

Sydney development Bond has experienced strong demand from downsizers.

The

10-level, 80-apartment project from developer Capital Corporation is due to finish this year.

“The location is so well connected, with great transport links, shopping, medical facilities and close to the beach and the city,” says Blake Schulze, director of NSW residential project marketing at Colliers International. “The redevelopment of the RSL … will be a great place for residents to go down and have a meal and a drink, or meet up with friends and family.

“The apartments at the podium level will also have generous landscaped terraces with garden beds, some of them up to 180 sqm of extra space, which will appeal to anyone who might miss their garden.”

Sydney's Bond development, apartments are being built above the Club Bondi Junction RSL. Picture: supplied

Off the plan is a growing trend for empty-nesters, says Amanda Graham, chief executive of retirement property site downsizing.com.au.

Many now seek luxury offerings and like the idea of living in a new property.

“People tend to be looking for apartments with plenty of room and good finishes – a study or a TV room, extra bedrooms for the grandkids to come and stay, and lots of parking,” Graham says. “Many people are also after beautiful common facilities such as gyms and pools which they don’t have to look after themselves, plus good security so they can lock up and (go) travelling.”

The mini golf course at the display village at Highlands estate by Stockland in Craigieburn is a hit with the kids. Picture: Stockland/supplied

This is general information only – always seek professional advice specific to your circumstances.

This is an edited version of an article that first appeared in DARE magazine and is published here in partnership with Australian Seniors.

■ The Australian Seniors Series: Inheritance and Retirement Survey finds 21 per cent have downsized to a smaller property in the past five

to 10 years.

■ 55 per cent of those who have downsized say it’s because a smaller property is easier to manage.

■ 43 per cent say it’s because they don’t need so much space.

■ 21 per cent could no longer afford the rent or repayments on a bigger property.

For more home and contents tips and stories, visit seniors.com.au

BUYING OFF THE PLAN ESSENTIALS

■ Consult a solicitor

■ Research the developer

■ Check plans for developments nearby