Buying off-the-plan gives high reward in Canberra's newest suburbs

As the ACT’s population continues to experience exceptional growth, Gungahlin is quickly becoming the region of choice for many of Canberra’s families, first home buyers and downsizers. Gungahlin is already home to over 71,000 people and this number is expected to increase to over 83,000 by 2020. The newly released Gungahlin suburb of Throsby is fast becoming a popular choice amongst purchasers due to its close proximity to community facilities and bushland whilst still being only 15 minutes from Canberra’s CBD.

According to the Suburban Land Agency (SLA), Throsby, named after European explorer Charles Throsby, is expected to be fully populated by up to 2,500 Canberrans in four years time.

Surrounded by the beautiful Goorooyarroo Nature Reserve with views to Black Mountain and the Brindabella Ranges, Throsby has been strategically master-planned to include green space around every corner.

In real estate, location is a major factor to consider when searching for a new home. Located only two and a half kilometres from the Gungahlin Town Centre and eleven kilometres from the CBD, Throsby is close enough to enjoy all that the city has to offer but also far enough that you can leave the hustle and bustle behind.

As Throsby is a new suburb, there is a plethora of choice when it comes to finding a new home. With a large variety of houses, house and land packages and townhouses to choose from, buying off-the-plan (OTP) is becoming an increasingly popular way for many Canberrans to embark on their journey into the property market.

Like just about anything in life, there is always an element of risk involved when it comes to buying property. It is a matter of weighing up the risks versus rewards.

Let’s start with the typical steps to buying off-the-plan:

1. Select and secure your chosen property with a $1,000 holding deposit;
2. Exchange contracts and take up to 30 days to top up your deposit to 5% of the properties purchase price with no more to pay until your new home is completed;
3. Over the next 12 months, continue to save for a larger overall deposit;
4. As your new home nears completion, lock in your finances with your financial institution;
5. Inspect your completed property and settle contracts on your new home; and
6. Move in!

It seems like a simple process doesn’t it? But this is where you need to weigh up the risks versus the rewards.

First in best dressed; cheaper pricing but longer to wait

Risk: You might have a little longer to wait for your property to be completed. OTP developments are often put on the market 2-6 months before construction starts, so if you buy into the development early on, you might have longer to wait.

Reward: Developers want to sell their properties and they want to sell them quickly. Introductory prices can be tens of thousands of dollars cheaper at the launch of a development than a couple of months later into the campaign. If you buy in early, you might pay thousands less than your next door neighbour!

Today’s prices; tomorrow’s property

Risk: In the housing market, prices can fluctuate for many reasons. Whilst the ACT has seen year on year growth, nothing is guaranteed!

Reward: You secured your property at today’s pricing. If the ACT property market continues to steadily increase, your property will increase in value.

So many options; find a development you like then choose your property.

Risk: As there are so many options, there is a lot of construction happening in your suburb. Your property might finish before or after another development.

Reward: Choosing the location within the development, floorplan, aspect and finishes. By reviewing the suburbs master plan, you can get some fantastic properties opposite parklands, green space and community amenities.

Interest rates, mortgages and incentives

Risk: Whilst interest rates are currently stable, this can always change. If you wanted to fix the term of your loan at today’s interest rates, you will have to wait until you settle on your completed property.

Reward: While a small deposit is made to secure the property, the outstanding amount doesn’t need to be paid until the property has been built. This provides you with time to organise your finances and if required, sell your existing home without the need for bridging finance. Government incentives such as the First Home Owner Grant and Stamp Duty concessions are based on date of exchange, so even if these incentives are removed, you will still receive them.

When you weigh up the risks versus rewards, Canberra is a good candidate for OTP purchases. The ACT’s stable economy, low unemployment and low rental vacancy levels are all contributing factors behind Canberra’s buoyant property market with the medium property price organically increasing from year to year.

The RiotACT spoke with Slade Minson from Luton Projects about OTP purchases and one of the most popular developments in Throsby, 3 Property Group’s ‘Vivace’.

“We are finding that many people are struggling to get into the housing market. Buying off-the-plan allows you to put down a small deposit to secure a brand-new home at today’s prices.”

“Most developments have a 12-18 months lead time, so once you have paid your initial deposit, there is nothing further to pay until the property is completed. This gives you time to save a bigger deposit and organise finances with your bank.”

“Every day we are meeting new people at the Tempo Collective display suite that are genuinely surprised at how much choice they have within their budget. Take Vivace for example; Where else can you buy a 90m² two bedroom townhouse, 15 minutes from the city, 3 minutes’ walk from bushland, with a pool, double glazing and all the modern luxuries for under $400,000?” Mr Minson said.

With so many OTP options already on the market and plenty more scheduled to be released in the near future, Canberra is proactively preparing itself for future generations.

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