For many Canberrans, buying a four-bedroom family home on a quarter-acre block in the suburbs may seem like a pipedream, but some savvy first-home buyers are finding another way into the property market.
In the current hot market, purchasing a townhouse or apartment off the plan can be a cheaper entry point, and can be a stepping stone towards one day achieving that great Aussie dream of owning your own free-standing home.
Using the 2020 COVID-19 lockdown to her advantage, Independent Property Group sales assistant Holly Smith decided to use her holiday savings for a deposit on an apartment, and the 20-year-old hasn’t looked back.
“I decided buying off the plan would be my best entry to begin building a property portfolio, and I was quite surprised how relatively achievable it was,” she says.
“I only had a small amount of savings behind me that I intended to use on travelling overseas, but because that currently isn’t possible, I decided to use the cash to buy my first property.”
Holly says she was able to negotiate with the developer to use what savings she had to exchange contracts, then continued to pay off the remaining deposit over a few months.
“It worked really well, and I finally learned the skill of saving, which I had never been great at before,” she says.
Holly has already built a substantial amount of equity in the property and intends to use it as an investment after living in it for 12 months.
“If you had told me a year ago I would be a homeowner in the inner south, I would have laughed as I thought it was unachievable without a large deposit saved, or without help from family,” she says.
“But now I can confidently say that entering into the property market isn’t as scary as it seems.”
Holly’s colleague, Independent Property Group marketing operations manager Natalie Runko, also took the plunge at the age of 23 and purchased a one-bedroom apartment off the plan after living in share houses since she was 18.
“But after a couple of years I decided I’d had my fill of living by myself, and would be better off financially to rent it out and move back into a share house,” she says.
“Ten years, and quite a few adventures later, I was looking to purchase a home for our new family and was able to use the equity in the apartment to help us purchase our family home.
“I then sold it for a substantial profit and used the profits towards some home improvements in the new house.”
Independent Property Group sales agent Nicholas Jacob says many first-home buyers, such as Holly and Natalie, are buying homes off the plan because it gives them extra time to save money and finalise their finances before settlement day – which can be up to two years.
He says buying off the plan takes a lot of the stress and urgency out of buying a home, compared to auctions which are fast-paced and highly competitive.
“When someone buys their first home off the plan, they have a timeline to work towards, they know what they’re getting and how much it costs, and with multiple apartments or townhouses in a new development to choose from, there isn’t the same level of fierce competition that we’re seeing at auctions right now,” says Nicholas.
“Also, not everyone is always financially ready to go out and start paying off a mortgage right away, and the off-the-plan construction timeframe gives them the opportunity to save more money.”
Nicholas says townhouse developments, such as the new Natura complex in Denman Prospect, offers a great opportunity for first and second home buyers, and even young families, due to the size of the homes.
“Larger townhouses, such as those in Natura, can be the ideal option for first-home buyers who are not ready for the four-bedroom home on a quarter-acre block,” he says.
Natura is due for completion in 2023, and about 90 per cent of the homes have already been sold off the plan, with a good proportion of those being by first-home buyers.
“Families that can’t afford more than a million dollars for a house are looking to townhouses with larger living spaces, outdoor space and garaging close to the city,” says Nicholas.
“It makes sense in these current times to get a foot in the door. And remember, it doesn’t have to be your forever home.”
If you’re thinking about buying a property off the plan, check out the new Natura townhouses at Denman Prospect.
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