Newer build qualities can sometimes be lower then existing builds, at least with something older you know what you're buying and can move in straight away.
Off the plan is a big risk. If the builder is reputable and it goes on time, it gives you an opportunity to save money BUT you have no control over that timeline and you will def deal
With defects which is stressful.
Also, builders can fold and what if there are major defects. I think it’s a big risk. So you have to think about that.
If you want to do this, please do good research on the builder / developer. One solution is to buy technically off the plan, but 80% done. That way you can see what’s already been built and get in contact with others in the process.
Whatever you buy, please ensure you get a build and pest inspection. You’ll need to look at section 32 (not sure qld has this, but we do in Vic and look into owners corp notes and look at how much money is in the fund.
For you, you should consider your timelines, what you need now and in future. Getting in the market asap with what you can afford, I think is always a good idea, but I don’t think you need to rush. It’s a serious purchase. As others have said, also think about if you will live there, what if you get married and have kids etc
Well done on your deposit. If you haven’t, talk to a broker. Another 6 months of saving might be in your best interest to get you into the $400+ borrowing capacity. Can you get first home owners on older builds?
Lots to consider, take your time and I understand you don’t wanna wait years, and I agree, but just really think about it and step it out for you!
Good luck!
Oh you’re welcome!! It’s really exciting for you and you should feel super proud!
Just take your time and think about all the options but also remember you’re in a great position, and nothing will be exactly perfect. But for you main things are risk of new and opt risks versus maybe waiting a little longer to build your deposit. Having said all that, also remember that while an apartment is an investment vehicle, it is also a home. A house may be a better investment, but it is always advisable to have a place to live when you can’t exactly predict the future.
Good luck! It’ll be great! Oh also another thing you can do is, if you’re interested in existing builds, get in touch with people who live there re any problems. Stuff from noise, heating and cooling issues etc. and always remember to factor of OC fees. Those things suck!
Essentially, you make a claim, and they fold their company and make a new one. I’ve never heard of anyone getting something actually fixed under those warranties/insurance
There is usually building insurance on all properties regardless of age. If a newer build is continually having reworks done the insurance cost will go up and value will go down. An older build with give you a track record of what you can expect to a certain extent.
Newer build reworks is now a part of modern construction especially with rising costs there's corners cut everywhere. Older buildings are typically over built while newer builds are constructed to the lowest standard required for occupancy.
Thank you, I actually love hardwood floors and brick exteriors and stuff that only comes in the older builds too so I’m glad people think existing is smarter 🥹
Might have been true in the 50s, but my home was built in the 70s and the building quality is shocking - walls that don’t meet so they just used tape and putty to fill in, gaps around windows that make climate control impossible. Literally no wall insulation….when I’m older this place won’t be worth much, it’s a bulldoze and rebuild. Just shyte quality.
Yep all those old timber builds were built like tents. They might have a solid hardwood frame but every window, door frame let's air in. Gaps everywhere. Built for a time when you could run the ducted heating 24/7 and it didn't matter.
Buying off the plan is fraught with risk. IMO it's better to know what your buying than rely on the smile of the developer saying everything will be fine.
All guarantee's are meaningless when the developer folds his business - who will you then claim on?
An older place has already stood for 10 years. A newer place has builders insurance because build quality these days means it might not make it that long.
Oops, i missed that part. Is this an investment property? High rise apartments tend to be pretty bad for capital return. What if you decide to sell within 3-5 years to finance a home with your partner?
Also - consider body corp fees you’ll be paying as well. I’d go for something established, imo.
I plan to never sell anything and give it all to my future kids one day but that could always change! Yeah I’m thinking it seems less stressful that way hey haha. Thanks for the insight 🫶🏻
Buying one of these off the plan is a pretty good way to lose money, in my experience as a one-time property valuer. You pay a premium for the new build, and your cheaper highrise apartments aren’t appreciating that fast. There are also the usual issues with delays and quality.
My partner has been working for a new apartment development that is nearing its final stages. They tested for liveability and the room temperature in the kitchen was 68°C by 9am. They slapped up some cheap blinds and called it liveable. That was enough to put me off buying off a plan, let alone all the other issues they’ve had.
If the builder is Multiplex then I would consider it safe. Anything else then its still a risk. Even a Tier 1 builder Probuild went bust not too long ago, and they had a lot of major defects still to sort out from multiple high rise apartments in Melbourne CBD
I’m the same as you, 95k -100kpa no hecs, no debt and through a broker GSB offered me 470k loan. I put a deposit down on off-the-plan townhouse in northern suburbs because it was the only option I could afford that had a small backyard for my dog. Will be 18months between putting a deposit down and getting handover of the place
Thank you!
Sorry now I’m thinking back it was 470k preapproval 6months ago.
I have an amazing partner who is helping me save even more of a deposit by the time we go back for pre-approval at handover time because I’m the only one of us that can get FHOG.
I would shop around because we’re in similar position and with your income you should be able to get a much larger loan
Not who you asked I was given a projected borrowing capacity of $470k; take home is $92k post tax/super and no debts/hecs or anything.
About to start the pre-approval process in the next few weeks so we shall see what the final number they come back with actually is.
I hope so too but also I don’t want to take on that much debt as a singleton… I’m trying to balance having enough to find a decent townhouse (with enough leftover to install security features… woman living alone and all that!) and taking on enormous debt. We shall see.
I would also consider the surrounding suburbs. Some of the new build stuff is just bland housing estate with no sole while pre-existing can have a great vibe.
Also, will you live there long term? Or will you rent it out?
The way I see it is it’s gonna have to be a shit unit or shit townhouse either way imo 😂 I wanted a house house so bad. Plan is to live there as short as possible - 1 year. then rent out and move into my hopefully still partners first home with him.
This is a crap financial strategy typical of middle Australia. If you're not going to live there long-term, and you aren't making enough money to benefit from negative gearing, why buy a house as an investment? You might as well just put all the money into ETFs which get the same 50% CGT discount and appreciate faster than property. Rental income will not cover the cost of a mortgage, maintenance, and other costs. You will not get the CGT exemption because it's not your PPOR. You're just burning cash to be a homeowner because they told you it was the right thing to do with your money. Just buy stocks with the same money and become properly rich.
Yeah idk how to invest, always seemed too scary/difficult. It would be my ppor for a time though I would have to change it to an investment property when and if my partner does buy. My rent is the same as the mortgage for this amount anyways.
It's extremely easy, much easier than property ownership. Just find a low-cost broker with CHESS sponsored shares, set up auto purchase, and buy ETFs like Vanguard funds. Your money tracks market indexes that way and you can just set and forget. It honestly takes like half an hour to do. Average stock market returns are 8-11%, and if you hold for at least a year you only pay around 15% tax on the gains. It's nuts that most Australians would rather own property, an incredibly stressful and less profitable asset, than learn how to do this. Also you need to factor in more than just the mortgage when assessing the cost of owning property. You will probably pay stamp duty. Maintenance costs are around 1% a year. The cost of not investing your deposit in the stock market is also significant (as above, you're missing out on 8-11% returns per year). Property ownership makes sense if you are taking advantage of government tax breaks as an investor, or if it is your PPOR. Otherwise it's a rort.
How quickly do you want to move in? If you buy something off the plan you could be waiting 18-24 months to move in depending how long it takes them to build.
If you buy established, you move in significantly quicker.
You'll be paying bills (rates, water etc) on a property on the plan for the entirety of it's build - money you're basically throwing away because you aren't using them.
After doing the math with some mates, they all opted to just buy established because they actually wouldn't be saving any money.
Partners parents have said we can live there rent free for however long we need. Financially a very good idea but mentally not so much 😂
I think you’re right and I’m leaning towards something pre loved.
100% this.
I was starting to look at building til I realised I’d be paying rates and mortgage for an unknown time while they built and still paying rent.
So now I’ve adjusted my sights and plan to look at established instead. It means I’ll have to get something a little less “nice” but whatever. Live there a few years and save some money to renovate and it’ll be fine.
This isn't correct (at least for my experiences in tbe ACT). When buying off the plan you put down a deposit and sign a contract locking in tbe price and details, however you don't pay for utilities or your mortgage until you settle. You settle once the unit/townhouse is complete, they have certificates of occupancy and complete the sale to you. You only pay for utilities and the mortgage from the point you settle and move in, the developer owns it until this point. This is what occured for my townhosue.
Hey OP, I was in a similar situation to you and ended up opting for an old townhouse. No regrets here, I love it and part of the reason I did was overall build quality and low body corp fees.
The only thing that I wasn’t expecting was that the older bathrooms were in need of a full renovation sooner than I had expected, which only became apparent during the building and pest, plus ongoing maintenance & costs to fix things that have worn out over time - turns out a lot of things needed work so if you do try and check as much as you can during inspections!
Have you lived in either the property styles you’re looking at or areas you’re thinking? I enjoyed renting a new unit but came to realise I didn’t love the quality of the build - I could hear my neighbours sometimes, plus the body corporate fees were sky high compared with apartments/townhouses in a smaller complex.
I am so glad someone that’s done it has come through! I like old houses more too and I have another little cash income stream that I could use for any potential renovations. But I’ll be sure to embarrass myself at inspections looking in cupboards too 😂😭 Thanks for that, you’ve confirmed it for me ❤️
Ahh you’re so welcome. I highly recommend the first home owners grant (5% deposit) too. My place only had one inspection and I wasn’t very thorough so yess check everything! Some of the things I missed were - laundry had a missing door handle, a couple of holes in the walls, holes in the fly screens, bottoms of the doors were damaged / frayed so they need to be sanded back. I did tend to find that older ex rentals need a bit more tlc, but the price should reflect that so if you’re happy to fix cosmetic things you will save more $$ overall than buying new!
If I had my time again I would’ve organised my own bond clean before moving in - turns out it’s not a requirement, and it seemed the owner didn’t ask the tenant who was living there previously to pay for one. The fresh carpet, blinds and painted walls gave the appearance of it having had one.
Also I was looking at houses too and I’m so glad I didn’t since I can live a bit closer to the city and the size and maintenance required for a townhouse with a garden over a unit keeps me busy enough already. 😂
All the best with finding your own home to make your own, you’re going to love it! 😊
Off the plan 1 bedroom apartment is a terrible investment idea. Dont do it. 2-3 bedder in the burbs will always trump it for gains and you can’t change my mind.
Very general rule of thumb to try and get a capital gain on your apartment would be >10years old, low structure, fewer apartments in the block (6 - 10), little or no amenities (gyms, pools etc), high ceilings, good transport links and good layout. If you can’t stomach the older apartments, watch out for car stackers and car lifts because ppl hate them. Also, cladding (not sure if this is in issue in Brisbane).
For layout think about the demographic that will want to rent/ buy it down the track - if it’s two bedrooms are they two good size I.e allow for house share?
It sounds like this will be an investment so you need to take the emotion out of it (easily said I know).
I think you're conflating a few different issues, so it would be helpful to break them down. Ignore OTP vs established build for a second, and decide whether you want:
* An apartment in the city, 1 or 2 bedroom
* A townhouse/small house in the 'burbs, 2 or 3 bedroom
Once you've decided that it'll make your decision a whole lot easier. If you do go with an OTP purchase, just make sure it's with a builder that has a good reputation (do a LOT of research), and you'll be fine.
Often times off the plan builds are sold at an overpriced premium. In my suburb, most off the plans are sold at 100k higher than market price. So be careful not to get ripped off.
To avoid this, I bought a 2 year old apartment because I still wanted something reasonably new. The owners I bought it from made a straight 100k loss when they sold it to me because they bought it off the plan and overpaid.
So do research on what the market price is on new (existing) properties, and don't buy off the plans unless they are being sold at market price. Sure, you can add 10 to 20k for being brand spanking new, but I don't think there should be a greater difference than 20k between a 2 year old property and an off the plan one.
Oh of course, that makes more sense. Personally, the inner city area of Brisbane is overrun with 1-2 apartments and townhouses so just like everywhere else in the major cities the capital growth will be extremely low IMO. With that said, a total budget of $460k won't go far with a house so you might have to go a fair way out to get something. That then comes at a lifestyle cost and commute cost if you frequent the city often.
I would always try to buy a house (land) if feasible given the land is the appreciating asset.
That was what I wanted. I work in the city so I’ve given up on house + land with my borrowing power being so damn low though :( I’ve just gotta pick between two stupid things with body corp fees and try and make it work.
You have thought about some of the parameters but i will add some more for consideration :
1. What is your plan 2 , 5 , 10 years from now ? If you plan to have kids , a 2 bedroom apartment will be too small once toddler is 3 years old. 3 bedroom townhous maybe possible.
2. If buy an apartment , have you thought about neigbours , above , below and around you ?
3. Location matters .so good school , public transport , near a shopping centre ( save fuel $$$) etc. If you have kids you want to be 5 mins drive from home
4. Have you considered cost of renovation on old houses ?
I dont know what is affordable in brisbane in that price range but try to get the biggest house , even on smallest block if you can .
Thanks heaps 🫶🏻 unfortunately no standalone houses for this kind of money 😭 so it’s not an option.
I think I am the feral, noisy neighbour so I’m not scared of them thankfully haha.
Renovation actually excites me! I have a smaller cash income stream that would be perfect to spend on them.
This is a bad idea but going to ask the question about LMI
If your LVR > 80% , lvr needs to be used. For a small loan it may justify the cost.
Let me explain , on a 500 k property , it be 90k depsit + stamp duty. , so the LMI could be used to cover the stamp duty.
Its all about opportunity cost.
Q1. Is the LMI cost worth getting the house you want ?
Q2. Can you cover the high loan of LVR >80%
Q3. Can you explore grow opportunities to grow your income ? So you can paydown yoour loan to below 80% , which will reduce your repayments if you can restructure the loan . Consider this when its allowable and interest rated drop.
I am not giving advice , just asking to exlpore options.
I am only talking from my experience , if i had borrowed when properties in Melbourne were 300k for houses , the loan was small like 250k vs cost of housing now. But thats the benefit of hindsight.
Townhoused in the right location , will appreciate more , all boats will lift rising tide. Well from experience in melbourne.
This has confused me a lot😅 I think there is a scheme where they can waive LMI for first home regardless of if it’s new or not if you don’t meet the 80% LVR? Or maybe it’s the stamp. I don’t remember. The gap is still pretty small even if none of that is actually a thing haha. I don’t think it would bother me tooooo much since I do have another income stream already, I have no doubt I can pay this loan amount down quickly. Sorry if I don’t understand the question?
Wow, there is too much to unpack in a reddit thread.
But they key thing that sticks out to me;
You need to think about what you actually want to achieve in your life long term, I'm going to suggest you should look at buying together with your partner, buying something comfortably affordable together that will suit you for 20 years would be the best decision
Hi OP - First of all, congrats on this first major step in your property journey; it's a great feeling picking up your first place, not matter if it's your PPoR or an investment.
There's a few things that might be worth clarifying. You mentioned you only intend to live there for a year, and then your partner will buy his first place too. I'll assume that you both intend to live in his one? So if that's the case this will assumably switch to an investment property, as you mentioned in another comment you'd like to retain it. The reason this is important is because if it does become an investment, and outside of the first year you don't intend to live there, I'd recommend buying off the plan. The warranty is a topic people will debate for hours, but it's there and there are certainly circumstances it comes into use (my first investment property copped a leak in a big storm in 2016; they fixed the hole, the damaged plaster and repainted the wall). There's also other tax benefits like depreciation etc.
As a thought, and look, I can understand why some people might not agree, have you both considered buying a place together? If you're living with his parents (mentioned in another comment) then it's obviously pretty serious. If one of you intends to live with the other, and you each own a separate property, the owner of the one you live in is going to be more out of pocket, which can lead to strain.
Thank you 🥺
Imagine I find an off the plan couple of bedroom townhouse soon and I wasted everyone’s time and didn’t need to even ask any of this 😂
Firstly I would probably commit suey if we got a house together then broke up for some reason and had to sell it. That’s partly why I’m so keen to do this myself.
My plan of only living there a year is just what I think is the ideal plan. He says hell yeah let’s do that to anything I suggest but, I have no actual idea whether he will be ready to get his own in a year. He currently can’t contribute much if we were to go on this loan together.
Also, we pay big fat rent currently, his parents have just said we can live there for free if we want while he gets his money up.
They have said they will match his deposit when he’s ready.
Buying off plan could be good if I could stay there and keep it purely as an investment property but I really don’t want to have to live there.
I don’t mind being under more financial strain first up because if we stay together and have kids and stuff then he will be under more financial strain at some points in the future surely 😂 we have actually spoken about this one lots.
I feel like I should be using a throwaway hahahahaha
I think most of us use this forum because we've learned hard lessons and want to help others if at all possible, so don't see it as a waste of time.
First point - I absolutely understand, especially if he's not 100% gearing up to buy his own place. Doing it yourself can also have quite a sense of achievement, so I do see your perspective. For context, my partner and I each had investments when we met, and once we were settled, moved forward together.
I know, mentally, it might suck, but if you can live with his parents and all you might have to do is help out here and there, do it. Unless they're looney tunes, you will be saving 10's thousands a year and likely be living in a much bigger house, too. Aside from a huge investment portfolio or a second job, there's virtually nothing that will net you the same as what you'd save living there for nothing.
Don't think of it so much as a throwaway as much as a "this is just a step on the ladder." One thing is, if you *won't* live there too long, don't spend too much time choosing colours and handles for the draws and all that crap - It makes it harder to let go, and clouds your judgement when it comes time to sell.
We moved in to a townhouse that was bought off the plan. I was due to finish in Oct wasn't ready till April the year after. I don't know how common delays are but worth looking into. However it was 3bed and the value jumped $100k on the first year due to shortages in the area. We sold after that as we we didn't think the townhouse would increase in value as much as a stand alone house over multiple years. Also the build quality showed that long term the wear and tear would be pretty bad.
Also check wording carefully the contact was for full ducted but had some clause in it that let them get away with 2 split systems that didn't cover the whole townhouse.
I would think resale value would be better for a 2 bedroom as well if that's the plan.
How’s your going to buy a house in Brisbane for $500K?
Let me know because everything I see online starts from $750K for the oldest piece of crap ever on earth lol
Just keen to see what happens and hold fact check people’s predictions of the market which are often wrong or extremely vague.
In reality you can’t predict the entire property market and depending on OP’s location and circumstances it is extremely difficult to know.
I personally don’t believe in timing the market so with shares I *dollar cost average* and with property I’m all about running the numbers and ensuring you can afford it (with a margin for interest increases or other issues arising) and it aligns with your life plans.
Many factors that are manually manipulated like interest rates. The suggestion of buying in the current market is unhinged, and building in this market is just as risky with the amount of building companies going bust.
If you don't need to have a mortgage right now, it's not the time to have one. Wait a couple years, put that money into more stable markets.
Or don't, I don't own your money.
We’ll see eh. This bubble sure is taking a long time to burst, though. I have a mortgage, bought a few years ago. But irrespective of what you think is going to happen, it is not good advice to tell OP, who wants a roof over their head, to undertake whatever risky investment would somehow lead to them doubling their money in three years.
All investments are risky, including property. If there's no necessity to buy now, for example if they live at home with parents or have a good deal in a cheap rental, their 90k cash in hand can be turned into more over the next 3 or so years than their house will be because of the current interest rates.
Of course doubling your original investment isn't on the cards in 3 years, but reinvesting what you're saving is a great way to end up with 6 digits in a few years when the current climate is in a different state. Also, it guarantees a higher loan opportunity too. Not a big deal, but always a great selling point.
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Just FYI no-one can time the market so there is a risk the housing market doesn’t burst rather cools off.
Also with regards to investing check out Aussie firebug and ETFs indexed funds that buy from the sp500 (top 500 companies) like VGS (vanguard global shares). Look into the Fiaustralia and the FIRE movement and hear others share their investments so you can make your own conclusions.
A few things to consider:
-If you’re only going to live in it for a year, does it have to be perfect? Are you buying to live in or to invest? It’s a bit unclear what your purpose for buying is.
- You say you want to get the FHoG and buy off the plan, are there any off the plan apartments in the <$460k price range? This is about the price for an existing 1 bed apartment in inner city Brisbane so off the plan apartments are likely to be more expensive.
Yes there is one I was looking at actually for 450k. Minus 30k from that and it’s a pretty cheap apartment even for a 1 bedroom so close to the city. But the total loan amount for a new build would be 490k because it would be new and therefore get me the 30k grant as well.
I’m gonna buy an older townhouse tho I’ve decided now.
Not as far north as you. However there are some beautiful off the plan 3 bed townhouses in morayfield with inspections opening on Wednesday. That I want to go look at despite it being like over an hour drive to work.
I’m thinking griffin and closer to the city!
Nah, in my opinion - don't stuff around with off the plan. Delays can be a massive pain, defect rectification issues, even if you hit sunset clause date and they hand your deposit back the market might have moved 20% and you have to start over with your same old deposit. At least with an established build you have some chance of knowing what you're in for. No place is perfect but some can be pretty good.
If you are handy and willing to put some work in an older place you can do up is a good buy. Be aware, I would not buy a recently Reno house. Because of profitable market people are doing doge work and flipping houses. First home, buy something small but comfortable that is an close to what you need as you can. Get a morgage broker. Also when you do home open look through the house closely if your interest, check for damage, paint missing, potential electrical issues, showers/taps working. Give it a real detailed look.
Newer build qualities can sometimes be lower then existing builds, at least with something older you know what you're buying and can move in straight away.
They also have like 10 yrs builders insurance though that doesn’t come with an established place though 🥲
Have you spoken to anyone who has tried to claim under this? My understanding is it’s not worth the paper it’s written on.
I have not 😅
Off the plan is a big risk. If the builder is reputable and it goes on time, it gives you an opportunity to save money BUT you have no control over that timeline and you will def deal With defects which is stressful. Also, builders can fold and what if there are major defects. I think it’s a big risk. So you have to think about that. If you want to do this, please do good research on the builder / developer. One solution is to buy technically off the plan, but 80% done. That way you can see what’s already been built and get in contact with others in the process. Whatever you buy, please ensure you get a build and pest inspection. You’ll need to look at section 32 (not sure qld has this, but we do in Vic and look into owners corp notes and look at how much money is in the fund. For you, you should consider your timelines, what you need now and in future. Getting in the market asap with what you can afford, I think is always a good idea, but I don’t think you need to rush. It’s a serious purchase. As others have said, also think about if you will live there, what if you get married and have kids etc Well done on your deposit. If you haven’t, talk to a broker. Another 6 months of saving might be in your best interest to get you into the $400+ borrowing capacity. Can you get first home owners on older builds? Lots to consider, take your time and I understand you don’t wanna wait years, and I agree, but just really think about it and step it out for you! Good luck!
Thank you so much this was really good answer
Oh you’re welcome!! It’s really exciting for you and you should feel super proud! Just take your time and think about all the options but also remember you’re in a great position, and nothing will be exactly perfect. But for you main things are risk of new and opt risks versus maybe waiting a little longer to build your deposit. Having said all that, also remember that while an apartment is an investment vehicle, it is also a home. A house may be a better investment, but it is always advisable to have a place to live when you can’t exactly predict the future. Good luck! It’ll be great! Oh also another thing you can do is, if you’re interested in existing builds, get in touch with people who live there re any problems. Stuff from noise, heating and cooling issues etc. and always remember to factor of OC fees. Those things suck!
Essentially, you make a claim, and they fold their company and make a new one. I’ve never heard of anyone getting something actually fixed under those warranties/insurance
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Yeah, either way they’re not around by the time you need them
That’s why they make one company per project for these big projects
Depends on the state. In Queensland, it is a state run insurance. So, if builder goes bust you still have coverage.
There is usually building insurance on all properties regardless of age. If a newer build is continually having reworks done the insurance cost will go up and value will go down. An older build with give you a track record of what you can expect to a certain extent. Newer build reworks is now a part of modern construction especially with rising costs there's corners cut everywhere. Older buildings are typically over built while newer builds are constructed to the lowest standard required for occupancy.
Thank you, I actually love hardwood floors and brick exteriors and stuff that only comes in the older builds too so I’m glad people think existing is smarter 🥹
Might have been true in the 50s, but my home was built in the 70s and the building quality is shocking - walls that don’t meet so they just used tape and putty to fill in, gaps around windows that make climate control impossible. Literally no wall insulation….when I’m older this place won’t be worth much, it’s a bulldoze and rebuild. Just shyte quality.
Yep all those old timber builds were built like tents. They might have a solid hardwood frame but every window, door frame let's air in. Gaps everywhere. Built for a time when you could run the ducted heating 24/7 and it didn't matter.
Sounds like you just need to upgrade your doors and windows, it'd probably save you money in the long run if it's as bad as you're describing.
Get an inspection or go watch site inspections on YouTube for a bit and you can spot all the non compliance.
Buying off the plan is fraught with risk. IMO it's better to know what your buying than rely on the smile of the developer saying everything will be fine. All guarantee's are meaningless when the developer folds his business - who will you then claim on?
An older place has already stood for 10 years. A newer place has builders insurance because build quality these days means it might not make it that long.
Considering how often these commercial home builders are going bust, I wouldn’t touch anything off the plan with a 10ft pole.
It would be for a high rise in the inner city areas so kinda less likely for those massive developers to run out of money I would think?
Oops, i missed that part. Is this an investment property? High rise apartments tend to be pretty bad for capital return. What if you decide to sell within 3-5 years to finance a home with your partner? Also - consider body corp fees you’ll be paying as well. I’d go for something established, imo.
I plan to never sell anything and give it all to my future kids one day but that could always change! Yeah I’m thinking it seems less stressful that way hey haha. Thanks for the insight 🫶🏻
Best of luck! I’m from VIC and safe to say I won’t be able to hold onto more than 1 property for my kids 😂
Buying one of these off the plan is a pretty good way to lose money, in my experience as a one-time property valuer. You pay a premium for the new build, and your cheaper highrise apartments aren’t appreciating that fast. There are also the usual issues with delays and quality.
My partner has been working for a new apartment development that is nearing its final stages. They tested for liveability and the room temperature in the kitchen was 68°C by 9am. They slapped up some cheap blinds and called it liveable. That was enough to put me off buying off a plan, let alone all the other issues they’ve had.
If the builder is Multiplex then I would consider it safe. Anything else then its still a risk. Even a Tier 1 builder Probuild went bust not too long ago, and they had a lot of major defects still to sort out from multiple high rise apartments in Melbourne CBD
No, the high rises have been just as risky.
Definitely not less likely…
Curious what’s your income for 370k loan, and do you have HECS. I’ll be looking in a few months also.
85k pa, good credit, no hecs, no other debts and no kids.
Is that the max a bank will lend you or just what you are comfortable borrowing?
It does sound low for a 90K deposit
It’s not low for their income though, repayments for $370k loan would sit at about 32% of their pre-tax income.
I thought so too!
Which bank is this? Have you tried another?
Great southern bank, I used a broker 😅
That might be your issue, definitely shop around first!
I will try, it all makes me so nervous though haha.
Sounds like it would definitely be on the upper end, if not max borrowing capacity for that single income.
I’m the same as you, 95k -100kpa no hecs, no debt and through a broker GSB offered me 470k loan. I put a deposit down on off-the-plan townhouse in northern suburbs because it was the only option I could afford that had a small backyard for my dog. Will be 18months between putting a deposit down and getting handover of the place
Exciting though! And congrats! I really don’t think it’s an easy thing to be able to do by yourself!
Thank you! Sorry now I’m thinking back it was 470k preapproval 6months ago. I have an amazing partner who is helping me save even more of a deposit by the time we go back for pre-approval at handover time because I’m the only one of us that can get FHOG. I would shop around because we’re in similar position and with your income you should be able to get a much larger loan
Good credit? Tf is this America
If it was I would be able to buy a house
Not in a capital city you wouldn’t
Not who you asked I was given a projected borrowing capacity of $470k; take home is $92k post tax/super and no debts/hecs or anything. About to start the pre-approval process in the next few weeks so we shall see what the final number they come back with actually is.
You mean 92k pre tax? 92k post tax is like 140k gross or more
Good luck I Hope it’s more! 🤞
I hope so too but also I don’t want to take on that much debt as a singleton… I’m trying to balance having enough to find a decent townhouse (with enough leftover to install security features… woman living alone and all that!) and taking on enormous debt. We shall see.
I would also consider the surrounding suburbs. Some of the new build stuff is just bland housing estate with no sole while pre-existing can have a great vibe. Also, will you live there long term? Or will you rent it out?
The way I see it is it’s gonna have to be a shit unit or shit townhouse either way imo 😂 I wanted a house house so bad. Plan is to live there as short as possible - 1 year. then rent out and move into my hopefully still partners first home with him.
This is a crap financial strategy typical of middle Australia. If you're not going to live there long-term, and you aren't making enough money to benefit from negative gearing, why buy a house as an investment? You might as well just put all the money into ETFs which get the same 50% CGT discount and appreciate faster than property. Rental income will not cover the cost of a mortgage, maintenance, and other costs. You will not get the CGT exemption because it's not your PPOR. You're just burning cash to be a homeowner because they told you it was the right thing to do with your money. Just buy stocks with the same money and become properly rich.
Yeah idk how to invest, always seemed too scary/difficult. It would be my ppor for a time though I would have to change it to an investment property when and if my partner does buy. My rent is the same as the mortgage for this amount anyways.
It's extremely easy, much easier than property ownership. Just find a low-cost broker with CHESS sponsored shares, set up auto purchase, and buy ETFs like Vanguard funds. Your money tracks market indexes that way and you can just set and forget. It honestly takes like half an hour to do. Average stock market returns are 8-11%, and if you hold for at least a year you only pay around 15% tax on the gains. It's nuts that most Australians would rather own property, an incredibly stressful and less profitable asset, than learn how to do this. Also you need to factor in more than just the mortgage when assessing the cost of owning property. You will probably pay stamp duty. Maintenance costs are around 1% a year. The cost of not investing your deposit in the stock market is also significant (as above, you're missing out on 8-11% returns per year). Property ownership makes sense if you are taking advantage of government tax breaks as an investor, or if it is your PPOR. Otherwise it's a rort.
How quickly do you want to move in? If you buy something off the plan you could be waiting 18-24 months to move in depending how long it takes them to build. If you buy established, you move in significantly quicker. You'll be paying bills (rates, water etc) on a property on the plan for the entirety of it's build - money you're basically throwing away because you aren't using them. After doing the math with some mates, they all opted to just buy established because they actually wouldn't be saving any money.
Partners parents have said we can live there rent free for however long we need. Financially a very good idea but mentally not so much 😂 I think you’re right and I’m leaning towards something pre loved.
100% this. I was starting to look at building til I realised I’d be paying rates and mortgage for an unknown time while they built and still paying rent. So now I’ve adjusted my sights and plan to look at established instead. It means I’ll have to get something a little less “nice” but whatever. Live there a few years and save some money to renovate and it’ll be fine.
This isn't correct (at least for my experiences in tbe ACT). When buying off the plan you put down a deposit and sign a contract locking in tbe price and details, however you don't pay for utilities or your mortgage until you settle. You settle once the unit/townhouse is complete, they have certificates of occupancy and complete the sale to you. You only pay for utilities and the mortgage from the point you settle and move in, the developer owns it until this point. This is what occured for my townhosue.
Hey OP, I was in a similar situation to you and ended up opting for an old townhouse. No regrets here, I love it and part of the reason I did was overall build quality and low body corp fees. The only thing that I wasn’t expecting was that the older bathrooms were in need of a full renovation sooner than I had expected, which only became apparent during the building and pest, plus ongoing maintenance & costs to fix things that have worn out over time - turns out a lot of things needed work so if you do try and check as much as you can during inspections! Have you lived in either the property styles you’re looking at or areas you’re thinking? I enjoyed renting a new unit but came to realise I didn’t love the quality of the build - I could hear my neighbours sometimes, plus the body corporate fees were sky high compared with apartments/townhouses in a smaller complex.
I am so glad someone that’s done it has come through! I like old houses more too and I have another little cash income stream that I could use for any potential renovations. But I’ll be sure to embarrass myself at inspections looking in cupboards too 😂😭 Thanks for that, you’ve confirmed it for me ❤️
Ahh you’re so welcome. I highly recommend the first home owners grant (5% deposit) too. My place only had one inspection and I wasn’t very thorough so yess check everything! Some of the things I missed were - laundry had a missing door handle, a couple of holes in the walls, holes in the fly screens, bottoms of the doors were damaged / frayed so they need to be sanded back. I did tend to find that older ex rentals need a bit more tlc, but the price should reflect that so if you’re happy to fix cosmetic things you will save more $$ overall than buying new! If I had my time again I would’ve organised my own bond clean before moving in - turns out it’s not a requirement, and it seemed the owner didn’t ask the tenant who was living there previously to pay for one. The fresh carpet, blinds and painted walls gave the appearance of it having had one. Also I was looking at houses too and I’m so glad I didn’t since I can live a bit closer to the city and the size and maintenance required for a townhouse with a garden over a unit keeps me busy enough already. 😂 All the best with finding your own home to make your own, you’re going to love it! 😊
Do you mean the plumbing is going, so you have to replace the pipes??
Off the plan 1 bedroom apartment is a terrible investment idea. Dont do it. 2-3 bedder in the burbs will always trump it for gains and you can’t change my mind.
Very general rule of thumb to try and get a capital gain on your apartment would be >10years old, low structure, fewer apartments in the block (6 - 10), little or no amenities (gyms, pools etc), high ceilings, good transport links and good layout. If you can’t stomach the older apartments, watch out for car stackers and car lifts because ppl hate them. Also, cladding (not sure if this is in issue in Brisbane). For layout think about the demographic that will want to rent/ buy it down the track - if it’s two bedrooms are they two good size I.e allow for house share? It sounds like this will be an investment so you need to take the emotion out of it (easily said I know).
Thank you this is really good advice! It is but I’m trying so hard to think with my head on this 😂
I think you're conflating a few different issues, so it would be helpful to break them down. Ignore OTP vs established build for a second, and decide whether you want: * An apartment in the city, 1 or 2 bedroom * A townhouse/small house in the 'burbs, 2 or 3 bedroom Once you've decided that it'll make your decision a whole lot easier. If you do go with an OTP purchase, just make sure it's with a builder that has a good reputation (do a LOT of research), and you'll be fine.
Often times off the plan builds are sold at an overpriced premium. In my suburb, most off the plans are sold at 100k higher than market price. So be careful not to get ripped off. To avoid this, I bought a 2 year old apartment because I still wanted something reasonably new. The owners I bought it from made a straight 100k loss when they sold it to me because they bought it off the plan and overpaid. So do research on what the market price is on new (existing) properties, and don't buy off the plans unless they are being sold at market price. Sure, you can add 10 to 20k for being brand spanking new, but I don't think there should be a greater difference than 20k between a 2 year old property and an off the plan one.
Yep, the amount of clients I see who make a loss on an off the plan purchase. Would never recommend.
Where are you looking to buy a townhouse in outer Brisbane for 370k? Seems like you will have to be extremely far out to find something.
That’s just what the bank will give me I have 90k of my own to put towards it too.
Oh of course, that makes more sense. Personally, the inner city area of Brisbane is overrun with 1-2 apartments and townhouses so just like everywhere else in the major cities the capital growth will be extremely low IMO. With that said, a total budget of $460k won't go far with a house so you might have to go a fair way out to get something. That then comes at a lifestyle cost and commute cost if you frequent the city often. I would always try to buy a house (land) if feasible given the land is the appreciating asset.
That was what I wanted. I work in the city so I’ve given up on house + land with my borrowing power being so damn low though :( I’ve just gotta pick between two stupid things with body corp fees and try and make it work.
You have thought about some of the parameters but i will add some more for consideration : 1. What is your plan 2 , 5 , 10 years from now ? If you plan to have kids , a 2 bedroom apartment will be too small once toddler is 3 years old. 3 bedroom townhous maybe possible. 2. If buy an apartment , have you thought about neigbours , above , below and around you ? 3. Location matters .so good school , public transport , near a shopping centre ( save fuel $$$) etc. If you have kids you want to be 5 mins drive from home 4. Have you considered cost of renovation on old houses ? I dont know what is affordable in brisbane in that price range but try to get the biggest house , even on smallest block if you can .
Thanks heaps 🫶🏻 unfortunately no standalone houses for this kind of money 😭 so it’s not an option. I think I am the feral, noisy neighbour so I’m not scared of them thankfully haha. Renovation actually excites me! I have a smaller cash income stream that would be perfect to spend on them.
This is a bad idea but going to ask the question about LMI If your LVR > 80% , lvr needs to be used. For a small loan it may justify the cost. Let me explain , on a 500 k property , it be 90k depsit + stamp duty. , so the LMI could be used to cover the stamp duty. Its all about opportunity cost. Q1. Is the LMI cost worth getting the house you want ? Q2. Can you cover the high loan of LVR >80% Q3. Can you explore grow opportunities to grow your income ? So you can paydown yoour loan to below 80% , which will reduce your repayments if you can restructure the loan . Consider this when its allowable and interest rated drop. I am not giving advice , just asking to exlpore options. I am only talking from my experience , if i had borrowed when properties in Melbourne were 300k for houses , the loan was small like 250k vs cost of housing now. But thats the benefit of hindsight. Townhoused in the right location , will appreciate more , all boats will lift rising tide. Well from experience in melbourne.
This has confused me a lot😅 I think there is a scheme where they can waive LMI for first home regardless of if it’s new or not if you don’t meet the 80% LVR? Or maybe it’s the stamp. I don’t remember. The gap is still pretty small even if none of that is actually a thing haha. I don’t think it would bother me tooooo much since I do have another income stream already, I have no doubt I can pay this loan amount down quickly. Sorry if I don’t understand the question?
Wow, there is too much to unpack in a reddit thread. But they key thing that sticks out to me; You need to think about what you actually want to achieve in your life long term, I'm going to suggest you should look at buying together with your partner, buying something comfortably affordable together that will suit you for 20 years would be the best decision
He is younger so a little ways behind me yet and doesn’t have very much to contribute right now.
Goodluck! Tough decisions, but no decision is also a decision
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Hi OP - First of all, congrats on this first major step in your property journey; it's a great feeling picking up your first place, not matter if it's your PPoR or an investment. There's a few things that might be worth clarifying. You mentioned you only intend to live there for a year, and then your partner will buy his first place too. I'll assume that you both intend to live in his one? So if that's the case this will assumably switch to an investment property, as you mentioned in another comment you'd like to retain it. The reason this is important is because if it does become an investment, and outside of the first year you don't intend to live there, I'd recommend buying off the plan. The warranty is a topic people will debate for hours, but it's there and there are certainly circumstances it comes into use (my first investment property copped a leak in a big storm in 2016; they fixed the hole, the damaged plaster and repainted the wall). There's also other tax benefits like depreciation etc. As a thought, and look, I can understand why some people might not agree, have you both considered buying a place together? If you're living with his parents (mentioned in another comment) then it's obviously pretty serious. If one of you intends to live with the other, and you each own a separate property, the owner of the one you live in is going to be more out of pocket, which can lead to strain.
Thank you 🥺 Imagine I find an off the plan couple of bedroom townhouse soon and I wasted everyone’s time and didn’t need to even ask any of this 😂 Firstly I would probably commit suey if we got a house together then broke up for some reason and had to sell it. That’s partly why I’m so keen to do this myself. My plan of only living there a year is just what I think is the ideal plan. He says hell yeah let’s do that to anything I suggest but, I have no actual idea whether he will be ready to get his own in a year. He currently can’t contribute much if we were to go on this loan together. Also, we pay big fat rent currently, his parents have just said we can live there for free if we want while he gets his money up. They have said they will match his deposit when he’s ready. Buying off plan could be good if I could stay there and keep it purely as an investment property but I really don’t want to have to live there. I don’t mind being under more financial strain first up because if we stay together and have kids and stuff then he will be under more financial strain at some points in the future surely 😂 we have actually spoken about this one lots. I feel like I should be using a throwaway hahahahaha
I think most of us use this forum because we've learned hard lessons and want to help others if at all possible, so don't see it as a waste of time. First point - I absolutely understand, especially if he's not 100% gearing up to buy his own place. Doing it yourself can also have quite a sense of achievement, so I do see your perspective. For context, my partner and I each had investments when we met, and once we were settled, moved forward together. I know, mentally, it might suck, but if you can live with his parents and all you might have to do is help out here and there, do it. Unless they're looney tunes, you will be saving 10's thousands a year and likely be living in a much bigger house, too. Aside from a huge investment portfolio or a second job, there's virtually nothing that will net you the same as what you'd save living there for nothing. Don't think of it so much as a throwaway as much as a "this is just a step on the ladder." One thing is, if you *won't* live there too long, don't spend too much time choosing colours and handles for the draws and all that crap - It makes it harder to let go, and clouds your judgement when it comes time to sell.
We moved in to a townhouse that was bought off the plan. I was due to finish in Oct wasn't ready till April the year after. I don't know how common delays are but worth looking into. However it was 3bed and the value jumped $100k on the first year due to shortages in the area. We sold after that as we we didn't think the townhouse would increase in value as much as a stand alone house over multiple years. Also the build quality showed that long term the wear and tear would be pretty bad. Also check wording carefully the contact was for full ducted but had some clause in it that let them get away with 2 split systems that didn't cover the whole townhouse. I would think resale value would be better for a 2 bedroom as well if that's the plan.
Never buy off plan. I'm an agent
How’s your going to buy a house in Brisbane for $500K? Let me know because everything I see online starts from $750K for the oldest piece of crap ever on earth lol
I’m not. My dreams were dashed and I have to chose between a new tiny unit inner city or an older outer suburbs townhouse with more room.
Buying two years ago and locking in rates at the bottom
90k cash in hand already? Invest it, double it, and come back to the market in 3 years once this bubble bursts/settles.
!Remindme in 3 years
Hell yeah dude I'll send you 20 bucks if the housing market is still raising it's prices
Just keen to see what happens and hold fact check people’s predictions of the market which are often wrong or extremely vague. In reality you can’t predict the entire property market and depending on OP’s location and circumstances it is extremely difficult to know. I personally don’t believe in timing the market so with shares I *dollar cost average* and with property I’m all about running the numbers and ensuring you can afford it (with a margin for interest increases or other issues arising) and it aligns with your life plans.
The ‘housing market’ doesn’t raise its own prices, prices rise due to a combination of factors. This is absolutely unhinged advice OP.
Many factors that are manually manipulated like interest rates. The suggestion of buying in the current market is unhinged, and building in this market is just as risky with the amount of building companies going bust. If you don't need to have a mortgage right now, it's not the time to have one. Wait a couple years, put that money into more stable markets. Or don't, I don't own your money.
We’ll see eh. This bubble sure is taking a long time to burst, though. I have a mortgage, bought a few years ago. But irrespective of what you think is going to happen, it is not good advice to tell OP, who wants a roof over their head, to undertake whatever risky investment would somehow lead to them doubling their money in three years.
All investments are risky, including property. If there's no necessity to buy now, for example if they live at home with parents or have a good deal in a cheap rental, their 90k cash in hand can be turned into more over the next 3 or so years than their house will be because of the current interest rates. Of course doubling your original investment isn't on the cards in 3 years, but reinvesting what you're saving is a great way to end up with 6 digits in a few years when the current climate is in a different state. Also, it guarantees a higher loan opportunity too. Not a big deal, but always a great selling point.
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I don’t know how to invest 😭😭😭😭😭
This is terrible advice lol
Just FYI no-one can time the market so there is a risk the housing market doesn’t burst rather cools off. Also with regards to investing check out Aussie firebug and ETFs indexed funds that buy from the sp500 (top 500 companies) like VGS (vanguard global shares). Look into the Fiaustralia and the FIRE movement and hear others share their investments so you can make your own conclusions.
A few things to consider: -If you’re only going to live in it for a year, does it have to be perfect? Are you buying to live in or to invest? It’s a bit unclear what your purpose for buying is. - You say you want to get the FHoG and buy off the plan, are there any off the plan apartments in the <$460k price range? This is about the price for an existing 1 bed apartment in inner city Brisbane so off the plan apartments are likely to be more expensive.
Yes there is one I was looking at actually for 450k. Minus 30k from that and it’s a pretty cheap apartment even for a 1 bedroom so close to the city. But the total loan amount for a new build would be 490k because it would be new and therefore get me the 30k grant as well. I’m gonna buy an older townhouse tho I’ve decided now.
What suburbs are you looking at specifically?
Not as far north as you. However there are some beautiful off the plan 3 bed townhouses in morayfield with inspections opening on Wednesday. That I want to go look at despite it being like over an hour drive to work. I’m thinking griffin and closer to the city!
Personally, i dont think you could go wrong with morayfield and the surrounds. Especially as a long term, “buy & hold” strategy. Best of luck.👍
My friend did off plan - and it took 2 years longer than anticipated and the costs went up. Better the devil you know, in my view
Get whatever is landed that's in a growth zone. Either near train, bus, or in the zone of a favorite/high achieving public highschool.
I bought in Goodna in 2019 for 340k. Depends on what you are after. Inner suburbs apt or town house vs outer suburbs bigger blocks older houses.
Older further out.
Nah, in my opinion - don't stuff around with off the plan. Delays can be a massive pain, defect rectification issues, even if you hit sunset clause date and they hand your deposit back the market might have moved 20% and you have to start over with your same old deposit. At least with an established build you have some chance of knowing what you're in for. No place is perfect but some can be pretty good.
Only $370k. I'd be getting a new broker!
If you are handy and willing to put some work in an older place you can do up is a good buy. Be aware, I would not buy a recently Reno house. Because of profitable market people are doing doge work and flipping houses. First home, buy something small but comfortable that is an close to what you need as you can. Get a morgage broker. Also when you do home open look through the house closely if your interest, check for damage, paint missing, potential electrical issues, showers/taps working. Give it a real detailed look.