Planning to buy off the plan... cost?

Hi everyone,

First time posting here. I have few questions regarding buying it off the plan.

I'm planning to buy a property that cost roughly 622k (1 bedroom, 1 bathroom, 1 car park space) in Ermington with my girlfriend. It will be built in 2017 so we have 2 years to pay off the rest after 10% initial deposit.

We earn roughly 90k+ per year (before tax) together and so far, we have saved up to 25k. We are planning to receive another 30-40k from our parents which will add up to roughly 60k. Few questions:

1. I'm wondering if me being a first home buyer, I'm entitled to 15k off for this property within the 10%? So altogether we only pay up to 45k?
2. Do we pay off the stamp duty during the 10% or can we pay it later off once the property is settled?
3. What other costs are there to consider? Legal fees? How much would it normally be?
4. Any advice on buying off the plan property? To be fair, the price is expensive for the area (1 bedroom!), wondering how much would it go up in Ermington NSW within 2 years?

Really appreciate it if someone can help me out here.

Thanks in advance!
 
1. I'm wondering if me being a first home buyer, I'm entitled to 15k off for this property within the 10%? So altogether we only pay up to 45k?

Not sure on this one, but I think you claim it back after all is settled (could be wrong).

2. Do we pay off the stamp duty during the 10% or can we pay it later off once the property is settled?

Petty sure it's at settlement - do you get any stamp duty discounts being OTP?

3. What other costs are there to consider? Legal fees? How much would it normally be?

Legals - $600-$1000

Running costs, i.e. body corp fees - prepare to pay double or triple their estimates.

Cost of additional fixtures - check your contract - you may need to fork out money for drapes/blinds etc

4. Any advice on buying off the plan property? To be fair, the price is expensive for the area (1 bedroom!), wondering how much would it go up in Ermington NSW within 2 years?

Main risk is if price goes down. If property value comes in at $600k at completion, bank may only lend you a maximum of $480k. You have to come up with the rest - and the contract is likely binding so you can't back out.

Other than that, inspect it very carefully on completion - we have found many things not installed correctly, broken (eg tiles) or wrong specs.

The Y-man
 
$622k for a 1bed , 1 bath, 1 car spot.

Wow. That is just crazy. Assuming this is the waterfront section... Still expensive for what its worth though in my opinion.

Good luck with it all.
 
Not sure on this one, but I think you claim it back after all is settled (could be wrong).

Thanks, I think once it's settled, we claim it back as well but wanted to make sure...


Petty sure it's at settlement - do you get any stamp duty discounts being OTP?

I think I do.. But then again, if the property is over 600k, I don't think I'm getting much...

Legals - $600-$1000

Running costs, i.e. body corp fees - prepare to pay double or triple their estimates.

Cost of additional fixtures - check your contract - you may need to fork out money for drapes/blinds etc

Thanks mate, do we pay all these right now or when the properties are settled (running cost should be after settled..)

Main risk is if price goes down. If property value comes in at $600k at completion, bank may only lend you a maximum of $480k. You have to come up with the rest - and the contract is likely binding so you can't back out.

Other than that, inspect it very carefully on completion - we have found many things not installed correctly, broken (eg tiles) or wrong specs.

The Y-man

Thanks for the advice... this is one thing I'm also not sure of. How much will it go up. It has waterview, ferry stations but it's further away from CBD and main shops...
 
$622k for a 1bed , 1 bath, 1 car spot.

Wow. That is just crazy. Assuming this is the waterfront section... Still expensive for what its worth though in my opinion.

Good luck with it all.

Yes it is... it is waterfront section but very expensive given the location isn't as convenient (it is close to Parramatta, 40-45 min drive to CBD). Not sure if it's worth investing into given 1 bedroom prices around the area is roughly 500k-550k I believe...
 
Yes it is... it is waterfront section but very expensive given the location isn't as convenient (it is close to Parramatta, 40-45 min drive to CBD). Not sure if it's worth investing into given 1 bedroom prices around the area is roughly 500k-550k I believe...

Hi Hoon

Admittedly I'm not keeping a close eye on this particular market but that does sound hugely expensive. I'd carry out LOTS of due diligence and read up about the pros/cons of Off The Plan (OTP) before proceeding with this.

My major concern would be if the valuation didn't stack up - you might find yourself not being able to obtain finance which means forfeiting your deposit (and possibly more).

Cheers

Jamie
 
Hi Hoon

Admittedly I'm not keeping a close eye on this particular market but that does sound hugely expensive. I'd carry out LOTS of due diligence and read up about the pros/cons of Off The Plan (OTP) before proceeding with this.

My major concern would be if the valuation didn't stack up - you might find yourself not being able to obtain finance which means forfeiting your deposit (and possibly more).

Cheers

Jamie

Hi Jamie,

Thanks for your reply. Can you recommend any good sites to read up on these pros and cons?

+

This is the property I'm talking about (already out in domain!)

http://www.domain.com.au/property/n...-the-plan/nsw/ermington/?adid=2011796171&sp=1

I'm doing some market research and I cannot seem to find any history of 1 bedroom being sold around the area...
http://www.realestate.com.au/invest/house-in-ermington,+nsw+2115

http://www.domain.com.au/apm/Research/Default.aspx?LocationType=Suburb&State=NSW&SuburbID=15932

Thanks in advance
 
Yes it is... it is waterfront section but very expensive given the location isn't as convenient (it is close to Parramatta, 40-45 min drive to CBD). Not sure if it's worth investing into given 1 bedroom prices around the area is roughly 500k-550k I believe...

Yea I'm aware of the location. I have a property in Ermington myself. For what its worth, my valuation for my place came in at $1,050,000. 3 Bedroom House + Detached 2 Bedroom Granny flat on 650sqm.

Are you also aware that directly on the other side of the water is Silverwater Jail (that said, heaps of families go to Blaxland Riverside Park which is right next door to Silverwtaer Jail).

To me its a bit pricey, but hey, its marketed as "waterfront", might take off in years to come, or it might not, who knows.

There are places that are selling for similar that are much bigger
http://www.domain.com.au/for-sale/8-33-hughes-avenue-ermington-nsw-2115?adid=2011761607

However it isn't off the plan, meaning the ability to save for a deposit during its construction isn't there for you.
 
Yea I'm aware of the location. I have a property in Ermington myself. For what its worth, my valuation for my place came in at $1,050,000. 3 Bedroom House + Detached 2 Bedroom Granny flat on 650sqm.

I see, how much do you roughly think 1 bedroom in Ermington is worth (median price)?

Are you also aware that directly on the other side of the water is Silverwater Jail (that said, heaps of families go to Blaxland Riverside Park which is right next door to Silverwtaer Jail).

I'm aware of that. There was a rumour that the jail will be moved to somewhere else... nevertheless, there's children's park there along side Newington town centre and I've been to both, very family oriented areas so don't think this matters a lot to them...

To me its a bit pricey, but hey, its marketed as "waterfront", might take off in years to come, or it might not, who knows.

I agree it's bit pricey... especially considering 1 bedroom properties tend to not grow as much as others do.

There are places that are selling for similar that are much bigger
http://www.domain.com.au/for-sale/8-33-hughes-avenue-ermington-nsw-2115?adid=2011761607

However it isn't off the plan, meaning the ability to save for a deposit during its construction isn't there for you.

Definitely, I don't think prices in Ermington should be as high as somewhere like Rhodes or Meadowbank. But I have to gamble and see if it pays off...

Thanks mate for the replies btw.
 
Royal Shores ...... I went to the showrooms there there about 1 month back and see what is all about. I like the winter garden concept myself and the showroom looks very nice (of course!) with glossy magazines. They even have free drinks on their fridge in the showroom!

If it is for your PPOR and you love water view (and opposite is the SOP parklands), then great. But don't expect great capital gains there (there could be capital loss short term) for a while though as I think Sydney has peaked. However, it is always good to live in a new house, new house smell!

The shopping at Ermington is not that great so apart from the water views and the proposed ferry, there is not much going for it. There is also no trains either. To me that is a killer.

If you really like water views, I would try Meadowbank or Rhodes as there are train stations around there. You should be able to buy a few year old 2 beders for mid-high 600s.
 
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