Buying off the plan vs an established property: pros and cons

Off the plan can deliver a brand new home, stamp duty savings, and full depreciation, but you carry sunset clause and market risk through the build. Established gives you certainty and immediate use, but you buy at today's price with today's fittings.

What does buying off the plan actually mean?

You sign a contract to buy a property that is either not built yet or partly built. You pay a deposit (usually 10 per cent) and settle when construction is complete and titles issue. Settlement can be 6 to 36 months away.

What are the pros of off the plan?

New building warranties. Full depreciation for investors. Latest energy and design standards. Ability to lock in today's price for tomorrow's completion. Stamp duty is calculated at contract signing on the value at that time (which in most QLD off the plan contracts means on the land component only for house and land, or on the current stage of works for units), which can produce meaningful savings.

What are the cons?

You are buying something you cannot walk through. Finish and materials rely on the display suite and specifications. Delays are common. The market can move against you. Sunset clauses can be used by developers to terminate and re-sell at a higher price if the project runs long, although recent Queensland reforms have limited this.

What is a sunset clause?

A clause that lets either party terminate if the project has not settled by a specified date, typically 3 to 5 years from contract. Queensland has tightened developer termination rights under sunset clauses, but you should still have your solicitor review the wording carefully.

What are the pros of established?

You see exactly what you are buying. Immediate settlement. Established gardens, matured neighbourhood, real comparable sales. Easier finance approval. Existing tenancies can be assumed for investors. No construction risk.

What are the cons of established?

No new building warranties. Older fittings, potentially higher maintenance. Depreciation is limited on the building unless recent capital works have been done.

How do you compare value?

Look at comparable completed sales in the area, not the developer's projected valuations. If a brand new comparable is selling for less than the off the plan price a stage or two behind, the off the plan is over the market.

What should you check before signing off the plan?

Developer track record. Builder QBCC status. Sunset clause wording. Specifications and inclusions in writing. Right to inspect during construction. Deposit held in trust, not released to the developer.

Important note

This article is general information only, not legal advice. Queensland property law changes and every situation is different. Before you act, speak with a qualified solicitor or licensed conveyancer, and verify current requirements with the relevant Queensland Government source (Queensland Government, Queensland Law Society, Office of Fair Trading, or the QBCC where applicable).

Where to from here

Thinking of developing or selling a completed project? Let's talk strategy and end value, or book a proper appraisal so we can map the numbers together. Curious what a finished product might be worth today? Jai will give you an instant estimate.