OFF PLAN DEVELOPMENTS
7 Reasons why off plan developments is such a good investment . Capital growth appreciation The earlier you buy into the development , the better the capital appreciation because you can get your pick of units at launch-price specials . You also extend the period of capital appreciation that happens before you take ownership . Buyers often benefit from at least 12 to 24 months of “ free ” capital growth during the construction period .
Current market prices are generally 20 – 50 % lower compared to the final phases on completion of the development . The early period often sees the fastest growth in property values
Affordable deposits
Off-plan purchases are generally secured with an upfront deposit ( varies up to around 10 % of purchase price ) which reserves the property until you get finance for the remainder of the balance .
There is nothing else to pay during the construction phase as the balance or bond approval for balance is only due on completion of the development . This amount is only payable sometimes 12 – 24 months later .
Immediate profits on selling property You can sell your property on completion of the development to make an immediate profit and financial return ( many times in the region of 30 % plus ) depending on when you bought .
By the time transfer happens and buyers have to start paying off their first instalment on their bonds , it may already be a good time to sell the property for a significant profit .
Ease of financing
Developers often approach banks to have their developments preapproved . This gives banks a chance to confirm that purchases within the development are likely to be financially successful .
When banks have confidence in a development ’ s potential , they are often willing to give qualified buyers very favourable interest rates .
SA Real Estate Investor Magazine APRIL / MAY 2023 50