Ello Lending Company logo
Services
Partners
Properties
FAQs
Insights
About us
Contact
Get in touch
Ello Lending Company logoYourLand logo
ServicesPartnersPropertiesFAQsInsightsAbout usContact
Privacy PolicyComplaints

Subscribe to our newsletter

Disclaimer

Comparison rates above are based on a home loan of $150,000 for 25 years. WARNING: The comparison rates are true for the example given only and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.

Important Information:

Any information provided does not constitute an offer of credit and are examples of what may be available to you based on the information available. It does not take into account any product features or any applicable fees. Lending criteria and the basis upon which we assess what you may be able to afford may change at any time without notice. For Fixed Rate home loans, break costs may be payable which can be significant if you change the whole or part of your fixed rate loan or where additional or early repayments are made during the fixed rate period.

All applications are subject to lender assessment and approval. Cashback offers may be provided by some lenders and may only be available for particular products, terms and conditions apply.

© 2025 Ello Lc Pty Ltd ACN 662 742 645. Australian Credit Representative Number 544008. Ello is a Credit Representative of QED Credit Services PTY LTD (Australian Credit Licence number 387856).

Back to Insights

What Are the Risks of Buying Off Plan? A Property Buyers Guide

29th May, 2023
Profile picture of author Ello
Ello
Cover image for What Are the Risks of Buying Off Plan? A Property Buyers Guide

Buying off plan can be an appealing option for property buyers in Australia, offering the potential for a lower purchase price and the opportunity to earn a substantial profit upon completion. However, it's important to be aware of the associated risks before committing to such a purchase. In this comprehensive guide, we will delve into the risks of buying off plan and provide valuable advice to ensure you make an informed decision.


What Does Buying Off Plan Mean?


Buying off plan refers to purchasing a property before it has been constructed. This entails buying based on plans and specifications provided by the developer. Typically, off-plan properties are sold at a discounted rate to attract buyers prior to the commencement of construction.


The Risks of Buying Off Plan


1. Delays in Construction:


One of the primary risks of buying off plan is the potential for construction delays. Factors such as inclement weather, material shortages, or alterations to the developer's plans can contribute to these delays. Consequently, you may incur additional fees or interest on your loan during the extended construction period.


2. Changes to the Property:


Another risk involves the possibility of the developer making alterations to the property during construction. These modifications might affect the layout, materials, or design of the property, resulting in the final product deviating from your initial expectations.


3. Financial Risk:


Buying off plan carries financial risks, including the possibility that the completed property may not appreciate in value as anticipated. This could be due to market fluctuations or the property not being as attractive or desirable as expected.


4. Legal Risk:


There is a legal risk associated with buying off plan, primarily stemming from the potential lack of clarity in the contract between you and the developer. Should any issues arise during the construction process, insufficient legal protection could leave you vulnerable.


Tips for Buying Off Plan


1. Conduct Thorough Research:


Prior to proceeding with an off-plan purchase, conduct extensive research to fully understand the process and identify potential risks. Additionally, assess the track record of the developer, ensuring they have a history of completing projects on time and to a high standard.


2. Seek Professional Advice:


It is essential to seek professional advice before committing to an off-plan purchase. Consulting with experts such as lawyers, accountants, or mortgage brokers can provide valuable insights, help you understand the process, and ensure you are adequately protected.


3. Scrutinize the Contract:


Thoroughly examine the contract before signing, paying close attention to all terms and conditions. Ensure you comprehend every aspect of the contract and verify that it offers appropriate safeguards in the event of construction delays or changes to the property.

While purchasing off plan can offer advantages, it is crucial to acknowledge and address the associated risks. By conducting meticulous research, seeking professional guidance, and carefully reviewing the contract, you can make an informed decision regarding an off-plan purchase.

At Ello Lending, we understand the risks associated with buying off plan, and we are committed to assisting you. Our experienced team of mortgage brokers can provide the advice and support you need to navigate this process successfully. Moreover, we can help you secure a customized home loan tailored to your specific requirements. If you have any questions or concerns, please don't hesitate to contact us for further assistance.

Other insights

View all
Cover image for How is Stamp Duty Calculated on Off the Plan Purchases?

How is Stamp Duty Calculated on Off the Plan Purchases?

Stamp duty rates for off the plan purchases vary across Australian states and territories. In Victoria, the rate is 4.5%, in Queensland, it is 4%, and in New South Wales, it is 3.5% for off the plan apartments. Stay informed about the latest rates as they may change over time. Our experienced mortgage brokers at Ello Lending can provide guidance and support in understanding stamp duty calculations. Contact us for assistance.

Cover image for Calculating The Stamp Duty on an Off the Plan Purchase NSW

Calculating The Stamp Duty on an Off the Plan Purchase NSW

Discover how to calculate stamp duty for an off the plan purchase in NSW and get expert guidance from Ello Lending, your trusted mortgage broker. We'll help you navigate the complexities of stamp duty and find the right home loan for your needs. Contact us today for personalized assistance and turn your off the plan property dreams into reality.

Cover image for Is Debt Consolidation Only for Credit Cards?

Is Debt Consolidation Only for Credit Cards?

Debt consolidation is not limited to credit cards; it encompasses various types of debt, including personal loans, medical bills, and student loans. It aims to simplify finances and potentially reduce interest rates and monthly payments. At Ello Lending, our mortgage brokers can provide personalized guidance on debt consolidation options to help individuals manage their debts effectively.

View all