Frequently Asked Questions
What is an Off-The-Plan property?
This is a property that is yet to be built. It could be an apartment, townhouse or house. You have to rely on such things as floorplans, 3D rendered drawings, lists and pictures of inclusions and other marketing material to make your selection.
What is a House & Land package?
House & Land package is a term used in the property market for a 'package deal' that consists of both a new home and the land on which it is built. The new home is most often a project home - one with a repeatable design, which has been tailored to suit the needs of the client and the site.
Basically, there are two types of House & Land packages:
- 1Usually consisting of a pre-built house and the land on which it is built.
- 2You select a lot (or block of land) from the available lots within a new (or to be developed) land release or housing estate and then choose a home design from among a limited number of project homes. These packages are sometimes called 'off the plan'.
In the case of Type (2) packages above, buyers will be able to customise their future home to a limited extent (varies from package to package). Among the numerous House & Land packages available in the market the standard of workmanship, quality of materials and inclusions vary significantly. Some are designed for first home buyers on a budget while others are luxury homes designed and built for an executive lifestyle.
Why are there 2 Contracts to Sign in a House & Land package?
As the term suggests, a House & Land package requires a lot (or block of land) to be purchased and settled and a house to be built on the land. Therefore, a loan for the land only is first required, followed by a second loan for the construction which is made to the builder in stages as construction progresses. The loans can be arranged separately, but are usually bundled together.
What is a Project Home?
A Project Home is a house from a limited range of designs built by a Project Home Builder. By building many of these "clone" houses individual design input and variation in building materials and inclusions are minimized. The builder can negotiate bulk discounts with suppliers and hence can build houses at a significantly lower cost than would be otherwise possible. It is no wonder that Project Homes are very popular in Australia.
What are the Risks Involved in Buying an Off-The-Plan Property?
- The market value of the property could have dropped from the time the deposit was paid to the date of settlement (could be a difference of several years). This is quite common for higher density developments such as apartment complexes, where the valuation of your unit may fall if there is an oversupply of units for sale by investors at the time of completion.
- You do not know exactly what you are going to get until just before the time of settlement. You were dependent on marketing brochures, perhaps what you saw in a showroom and the list of inclusions in the sales contract. Most people are unable to visualize the real sizes of rooms and other spaces just by looking at a floorplan. We have clients who complain that they did not expect the size of a bedroom, balcony or open plan area "to be that small!"
- Delays in completion affecting expected timing in moving in can cause major inconvenience for those buyers on rental agreements.
- Exit or sunset clauses in the sales contract that favour the developer (vendor) to the buyer's disadvantage. It is best to get professional advice from a solicitor before signing the contract.
- The high marketing costs incurred by the developer (vendor) could be built into the selling price.
How can I tell whether I'm Paying Fair Market Price for a Property?
To be completed.....
What are the Owner's Outgoings for an Apartment and a House?
These outgoings are as follows:
For an Apartment**
- Council rates
- Owners Corporation (previously Body Corporate) charges which could include building insurance, water and sewerage charges and common area maintenance.
- Land tax (if applicable).
** also could apply to villa units and townhouses.
For a House
- Council rates
- Building insurance
- Water and sewerage charges
- Land tax (if applicable)
What is a Plan of Subdivision?
A plan of subdivision delineates the break -up of a piece of land, showing parcels of land called 'lots', that can be sold separately. The plan of subdivision is registered with Land Use Victoria and an owners corporation is automatically created if the plan includes common property.
The plan of subdivision defines and governs the ownership of land, buildings and airspace. It sets out private lots, common property and each lot owner's voting entitlements and financial contributions.
How is a Building Measured?
To be continued....