There is a lot of interest in buying off-plan, not least because of the incentives offered through government schemes and the longer timeframe to settlement. However, stories about the risks that come with buying sight unseen may have you feeling cautious.

Let’s run through some of the pros and cons to help you decide if buying off-plan is right for you, whether you’re a first home buyer, home mover or investor.

What is buying off-plan?

Buying off-plan is when you contractually agree to buy an apartment or house from a developer before it has been completed, or even begun. You pay an upfront deposit, with the rest paid in agreed instalments as work stages are met or at completion. This delay can give you more time to save and reduce your final mortgage loan amount.

Every state government has off-plan buyer protections in place, including a legal cooling off period after you pay your deposit. However, it’s important to understand that once you pay your deposit, you are committed to paying the full amount on completion. It’s not a case of only losing your deposit if you pull out.

Weigh up the financial pros and cons

Government incentives

The deciding factor for many people is financial. Most states offer financial incentives such as reduced stamp duty, especially for first home buyers. These incentives can change annually, and some have limited annual numbers so always check what’s available within your timeframe.

Locking in your purchase price

Purchasing a property off the plan can give you time to save between signing the contract and paying your deposit and settlement. This can be put towards reducing your loan, stamp duty or other costs.

It can be a common assumption that buying off-plan is cheaper than buying an established property. This may be true if you’re buying in a rising market, then it may be cheaper to buy earlier rather than wait for a completed property 18 months down the track. However, in a falling market, the opposite may be true.

Personalise your new home

Some developers let you choose fixtures and finishes like tiles and floor coverings. If you’re buying a house, you may be able to increase the ceiling height or adjust the floor plan too. But remember, any changes from the standard package will add to your final price.

An energy efficient home

Another big plus is that your new home may be more energy-efficient and in better condition than older properties with a builder’s guarantee. You probably won’t spend as much on repairs and utility bills in the years ahead and have protection for any faults you may find down the track.

Unexpected costs

Especially with house builds, there will be items such as security systems and landscaping not covered by the developer. You may also have unexpected construction expenses like dealing with water seepage. You may need to pay for these extras before completion, so double check what’s included in your contract, what is and isn’t a fixed cost, and the payment deadlines for other suppliers.

Construction delays

While your contract may have a written completion date, delays can occur. Depending on your circumstances this can cause not only an inconvenience and uncertainty but can increase your costs if you are currently renting.

Research and budgeting are everything

It’s important to do your research before signing any off-the-plan contract. Make sure you get a written completion date and schedule of works from the developer and understand exactly what is and isn’t included in the price. Also check that the developer cannot end the contract without your consent.

You’ll want to know the developer and or builder has a history of quality construction and is financially solvent, particularly in light of the current environment. Also check the plans for the suburb’s infrastructure and if it’s in danger of being overdeveloped.

As with all major purchases, deciding if buying off-plan is right for you comes down to doing the research, sticking to your budget, and going in with your eyes open. That way, you could be on your way to building your energy-efficient dream home.

Give us a call if you’d like to discuss financing your new purchase.

One of the biggest challenges first home buyers face at present is saving for a decent deposit. While there are definitely some advantages to buying as a couple compared to on your own, pooling your savings for a deposit can put a strain on even the most solid relationship.

So here are some tips to help you into your own home, while keeping the harmony in your relationship.

Working together on the three ‘C’s’

Getting a deposit together is all about saving as much as possible, keeping in mind that you will most likely be earning different amounts and have distinct approaches to managing your money. Focussing on the three c’s, communication, compromise and setting common goals, can help you maintain a healthy and happy relationship while you are saving for your own home.

Communication

The key is to keep talking. Communication is critical but it’s also important to know the type of conversations you need to have about money and your goals for home ownership, can bring up strong emotions. It’s Ok to call time out if it’s getting heated and pick up the chat another day when you are both feeling calmer.

Then make sure you come together regularly to look at and discuss how your finances are going.

Compromise

It can be hard to reach agreement about your plans to achieve your goal, a little give and take can make things easier. You can start by understanding where the other person is coming from. ‘Money values’ are often hard to shift and formed in childhood, so a little empathy can go a long way.

If one person is a spender and the other a saver, find ways you can both compromise to avoid friction in your relationship. The saver in the relationship may need to relax the reins a little from time to time to have some fun, and the spender may need to make some sacrifices to achieve your common goal of owning your own home.

Common goals

Keep in mind what you are doing this for – keep the focus on your final goal of picking up your keys and walking together through the door of your own home. While that’s the ultimate goal you share, there are other considerations you need to make sure you are on the same page about.

Thinking about what you are both looking for in a property, what areas you are interested in buying in and what you are likely to have to spend, will help you decide your budget for your purchase and how much you’ll need to save for a deposit. Another consideration is how much lenders will let you borrow and that’s where we come in.

In terms of how much you need as a deposit, most borrowers try to save 20% of the property purchase price to avoid paying lender’s mortgage insurance. For example, if you wanted to buy a $750,000 property, you’d need to come up with $150,000 to complete the required deposit.

Another aspect to consider is your timeframe for coming up with the deposit. While it’s understandable you are impatient to buy as soon as possible, it’s important to be realistic about how long it will take you to save the required amount.

Knowledge is power

Having a clear understanding of your financial situation will help you work out what is achievable. This is a time for you both to put all of your cards on the table. It’s important that both of you know your outgoings and where your money is being spent to help you cut costs or find ways you could earn a little more to help with your deposit. It’s also important to reduce existing debt and also look at your respective credit scores to see if anything can be done to improve them.

Think about the best way to structure your financials. While it’s usual that managing the household finances and paying bills will fall largely to one person in the relationship, it is important that both parties are involved in the planning and setting up of accounts and setting up budgets for savings targets.

Your also need to consider what government grants might be available to you and the best loan structure for your needs. Contact us today to discuss how we can help with the finance side of things.

And remember – you’re in this together, and together you’ve got this!

The new financial year marks the opportunity to access a raft of support to help more people buy a home. Now is the perfect time to sort through all the national and state schemes and find the ones that are right for you.

Three National Home Guarantee Schemes

The National Home Guarantee Scheme (HGS) has expanded to help more groups that find it difficult to buy their own home.ⁱ All three offer a government guarantee of your below 20 per cent deposit loan which save the cost of Lenders Mortgage Insurance (LMI). No money changes hands but having a loan with a deposit of 5 per cent or even 2 per cent guaranteed by the government could help you get into the market sooner. Let’s take a brief look at what’s on offer.

The First Home Buyer Guarantee (FHBG) supports up to 35,000 eligible first home buyers each financial year. You must have a minimum deposit of 5 per cent, while the maximum price and other conditions vary from state to state. The scheme now accepts joint applications from friends, siblings, and other family members and buyers who have previously owned a home may also be allowed to apply as long as their last ownership was at least 10 years ago.

The Regional First Home Buyer Guarantee (RFHBG) is for eligible first home buyers in regional areas. There are 10,000 places available each financial year to 30 June 2025. Again, the maximum cost of the home and the applicant’s annual income varies state to state but a minimum 5 per cent deposit is needed wherever you are.

The Family Home Guarantee (FHG) supports eligible single parents and single legal guardians with at least one dependent child. That now includes single aunts, uncles and grandparents caring for a child. The minimum deposit needed is just 2 per cent, with 5,000 places available each financial year to 30 June 2025. Again, there are limits on annual income and the cost of the home.

One thing to keep in mind when looking at these schemes is that most, but not all, lenders will include the schemes when assessing your home loan application. It may save you valuable time and keep your banking record clean if you check with us before applying for any scheme or loan.

State specific grants, stamp duty and shared equity schemes

Regardless of where you are buying, you’ll find that each state or territory has some form of support for first home buyers. Usually, these offer payments or discounts to first home buyers purchasing new properties, or house and land packages. These grants are not taxed and don’t have to be repaid, making them worth considering.

Stamp duty is a huge up-front cost for buyers. All the states have a minimum price threshold before stamp duty is charged. They also offer one-off stamp duty concessions for first homebuyers paying below certain amounts. In some states, first homebuyers can also opt to pay a much smaller annual land tax instead of stamp duty.

Shared equity schemes are also broadening the people who qualify. Shared equity is when the state government buys a portion of your home. This reduces your deposit, loan amount and repayments. In return, if and when you sell, they will take that percentage of the sale price. Shared equity is traditionally only offered to key workers. However, in some states, single parents and singles aged over 50 can also apply.ⁱⁱ

First Home Super Savers Scheme

Another scheme is the national First Home Super Savers Scheme. In this, you make contributions into your super fund to save for your first home. Depending on how many years you’re registered with the scheme, you can withdraw a maximum of $50,000, plus the calculated earnings from those investments.ⁱⁱⁱ You find out how much you can access by asking for a FHSS determination, and then request a withdrawal when you sign the contract for your home. This takes a minimum of 20 days, so planning is crucial. Because it affects your super, it’s wise to get financial advice before you do it.

While having more schemes to choose from provides options, sorting through your options can be complicated. The capped number on some offers means it’s best to get in touch with us sooner rather than later, so call us today

i https://www.nhfic.gov.au/support-buy-home
ii https://www.firsthome.gov.au/
iii https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/

If you are saving for a long-term goal like a home deposit, it can feel like you have to miss out on things such as travel to keep your savings on track. That’s not necessarily the case, it is possible to have a fantastic holiday without breaking the bank or derailing your savings plans.

Let’s face it, cost of living pressures are being felt everywhere in our day-to-day budgets but even more so when it comes to things like flights and accommodation. While airfares have fallen from the historic highs experienced in early 2023, they are still pretty pricy, and with booming demand for accommodation, comes equally high prices.

If you want to get away for a holiday but don’t want to break the budget, here are some ideas to help you keep costs down when you travel.

Plan ahead for the best deals

While it’s lovely to head out of town on a whim, being spontaneous can be expensive. The sweet spot for international travel according to Skyscanner’s data is 22 weeks in advance but be aware that it varies from city to city. For domestic travel it’s also best to be prepared as the best bargains can be had 21 weeks in advance.ⁱ

Flights are often more expensive around school holidays and different destinations are pricy for both flights and accommodation during their peak travel times. For example, fares to Bali skyrocket during winter when Australians want to escape to tropical paradise, but if you head to Bali during the wet season from October to March you may be able to access to great deals, if you don’t mind a bit of rain.

Keeping accommodation costs down

Once you’ve got flights sorted it’s time to think about accommodation and if you think booking a place to stay for a holiday has gone up over the past few years – you would be correct! Airbnb has released figures showing the cost of short-term stays has gone up 35% in the past three years.ⁱⁱ

To keep costs down you might want to consider housesitting – either informally through friends or family, or through online services that enable hosts and guests to make arrangements. Aussie House Sitters claim to be “the largest, most trusted house-sitting website in Australia.”

Volunteering in Australia or abroad also provides access to free accommodation, and the joy of knowing you are helping a worthwhile cause. Free Volunteering is one of several sites that offer opportunities ranging from teaching English overseas, to helping out at a hobby farm or hostel in exchange for free board.

You might also consider a working holiday, with jobs ranging from picking fruit in Cairns or serving tables in Bondi to earn money while enjoying a bit of a change of scenery. Check out Working Holiday Jobs.

Hit the road for a budget holiday

You could also avoid airfares and accommodation altogether and head out on the road to explore your own backyard. Camping can be an inexpensive way to see the country and while the cost of all the equipment you need may be intimidating, embrace the sharing economy and check out sites where you can borrow a range of stuff from tents to stoves, or ask friends if you can borrow their gear.

Getting away in a campervan has never been more popular, but when customers only want a one-way rental, it provides opportunities for bargain hunters as rental firms will offer discounts for vans to be relocated from city to city. If it works in with your itinerary it can be an affordable way to get from “A” to “B”.

Finally, it’s easy to get carried away when you are on holiday and break the budget, so it’s a good idea to not only plan your break and develop a budget you are comfortable with , but also check in from time to time during the trip, to see whether you need to tighten the belt a little or can afford to lash out on that great restaurant you just spotted.

With a bit of planning, you can come back with incredible memories AND a healthy bank balance!

i https://www.skyscanner.com.au/bttb/best-time-to-book-au
ii https://www.marketwatch.com/story/airbnb-executives-want-average-prices-to-come-down-after-years-of-increases-62079068