Who doesn’t love the feeling of stepping into a new home? Fresh carpets, new paint and a bath no one else has ever soaked in are hard to beat.
Buying off the plan can also mean stamp duty savings and other incentives. But there are several factors to decide on before signing on the dotted line and committing to a new home build. In this article, you’ll discover our tips to buying a brand new home.
Familiarise yourself with the area
Whether you’re a new home buyer entering the market for the first time or an existing owner, a good first step is to understand what is happening in the property market. Both owner occupiers and investors should consider factors like current vacancy rates, rental yields and demographics of the area you’re considering.
New home developments are often built on the outer ring of the city so there may not be a lot of sales history. You can get an understanding of the potential for growth by looking at how nearby suburbs have fared. Research the suburbs closer to the city and see if they have experienced steady growth.
Also, consider the future of the area. The expansion of public transport networks can see house prices rise quickly, so look at where development is planned and you may be able to take advantage early.
Finally, spend a lot of time in the neighbourhood you’re considering to get a feel for the lifestyle and amenities. In areas where a lot of development is happening, there may not be many services available right away. But consider whether there are plans for open spaces, childcare, schools and shopping centres, and how far away they may be from completion.
Research the developer
Once you’ve decided on the area you want to live, do a background check on the developer and/or builder before you enter into a contract.
It’s important to find a reputable and trustworthy developer to ensure you get the house of your dreams. Ask about their previous projects and whether these were completed on time. Do they have a reputation for delivering on the type of build you’re considering? They may have completed lots of smaller projects, but if they’re now embarking on a large-scale build this could highlight a potential risk.
Once you have the contract, make sure you have a conveyancer look over it to check the conditions. Ensure you know your obligations and what will happen if things don’t go as planned.
Get in early
Some experts warn about getting in too early, lest the developer struggles to sell and you’re left living in a half-finished development.
However, if you’ve done the research on your developer and they have a history of fully-completed builds, getting in early offers a number of benefits including having your pick of home in the estate.
Buying in early may also mean your home is completed first, allowing you to move in and get settled faster.
Take advantage of the extra time
Buying off the plan means an extended settlement time, which could be anywhere from a year to two years from when you sign the initial contract. This extra time means you have longer to save and make plans to pay off your mortgage. You will also have plenty of time to sell your current home, if needed, and organise your move.
Look for government incentives
One of the most attractive elements of buying a new home over an established one is the suite of incentives – especially, for first home buyers.
First home buyers purchasing a new build in Victoria can take advantage of the First Home Owner Grant (FHOG) which is a $10,000 payment, for homes with a dutiable value up to $750,000.
First home buyers in Victoria receive a 100 percent concession on stamp duty payable for homes with a dutiable value of less than $600,000, with stamp duty phased in for homes valued between $600,001 and $750,000.
If you’re not a first home buyer, you can still take advantage of concessions as long as you use the property as your principal place of residence for a period of 12 months. This applies to homes with a dutiable value of $550,000 or less.
It’s important that you speak with a conveyancer or solicitor to familiarise yourself with the concessions available to you before entering into a contract.
View Bank Homes is a family owned business with over 25 years experience in building homes across Melbourne. Find out more about our homes here.