Buying off the plan in Australia: pros and cons

When you buy off the plan, you agree to a price before the home is finished or its title is registered. That can give you time to save and choose some of the finishes. But the bank doesn't lock in your future loan just because you've signed the contract.

You still have to be able to pay when the property is ready. I'd want to know where the extra money would come from if the bank's valuation falls short. With an 80% lending limit, a $50,000 drop in value would leave you needing another $40,000 in cash.

The bank generally works from the lower of your purchase price and its valuation, then applies its lending limit. So a lower valuation can mean a smaller loan even though you still owe the developer the agreed price. A higher valuation doesn't automatically let you borrow more.

Say you agree to pay $800,000 and plan to borrow $640,000, with $160,000 of your own money towards the price. Before settlement, the lender values the property at $750,000.

You'd need that $40,000 on top of the $160,000 you already planned to contribute, plus buying costs. We could ask whether a lender will lend a larger share of the value, but that may bring mortgage insurance or property restrictions into the picture. It isn't a guaranteed fix, and a smaller loan doesn't cancel your purchase contract.

Before you sign, I'd run that lower-value calculation using your own price and savings. Our deposit calculator helps add up the buying costs too. Keep the money for those bills separate from any savings you're relying on to cover a shortfall.

You choose from plans, specifications and the developer's contract. You may be able to select finishes, and there can be more time to save before settlement. Those benefits depend on what the contract actually promises.

An apartment under one purchase contract isn't financed the same way as a house and land package with separate contracts. The payments and timing can be different. Send us the actual proposal so we're working out the loan for what you're buying.

Check the floor area, car space, storage, finishes and any permitted substitutions. For an apartment, look at the proposed body corporate budget as well as the unit itself. Our apartment home loan guide covers the property checks lenders may make.

You may get a new home with the layout and finishes you want, plus time to save while it's built. Agreeing a price now can also work in your favour if comparable homes become dearer. But values can fall too, and a contract signed today can leave you with a bill due years later.

I'd compare it with a completed home at the same price. Add the rent you'll pay while waiting, the body corporate budget and any upgrades that aren't included in the display-suite price. Then decide what you're getting for the extra uncertainty.

Look at the developer's completed projects and who will actually build this one. If possible, visit a finished development and ask about defects and how they were dealt with. Check the builder's licence and have your solicitor review the company, contract and disclosure details. A good past project is useful evidence, but it doesn't guarantee this project will finish.

Compare the price with nearby completed homes as well as other new developments. Our property research guide gives you a starting point.

A pre-approval has an expiry date and conditions. It does not reserve today's lending rules or guarantee finance for a property completing in a few years. Read what pre-approval covers before relying on it.

Your finances can change while the building goes up. A car loan, lower income or a property the bank won't accept can leave you with less borrowing than expected. Let your broker know if the completion date moves, and talk through any new debt before taking it on.

The display suite shows you what the home could look like. Your contract says what the developer has actually promised. Have an independent property solicitor read the contract and disclosure documents before you pay a deposit, particularly these parts:

• The completion and sunset dates, and what happens if the project runs late.
• Changes the developer can make to the layout, size, finishes or common property.
• Where the deposit is held and when it can be released.
• Any finance condition, cooling-off rights and notice deadlines.
• Your options if construction stops, the developer becomes insolvent or the finished property differs from the contract.

Queensland's 2023 sunset-clause reforms apply to off-the-plan land contracts covered by the Land Sales Act. They do not automatically cover community-title apartments. Under those land-contract rules, a seller needs the buyer's written consent, a Supreme Court order or another prescribed basis to use a sunset clause.

Ask which law covers your purchase. Queensland's off-the-plan guidance explains that distinction. Different states have different rules; do not rely on a national summary to decide whether you can end a contract.

If a delay or change occurs, send the notice to your solicitor promptly. Whether you can terminate, recover a deposit or claim compensation depends on the law, documents and timing.

If you're paying $650 a week in rent and completion slips by 12 weeks, that's another $7,800 to find. Storage or changing the removalist booking can add to it.

I'd keep a buffer for delays separate from the deposit and buying costs. Extra time only helps you save if your ongoing bills leave something over.

A grant, a duty concession and a government-backed loan do different jobs. I'd work out which help you can actually use before subtracting anything from your buying budget.

Queensland's first home owner grant is $30,000 for eligible new-home contracts signed on or after 20 November 2023. The grant has continued beyond 30 June 2026. The home and land must be worth less than $750,000, including contract variations. Exactly $750,000 is too much.

You still need to meet the first-home ownership, residency and other conditions. Check QRO's eligibility rules before counting the grant in your budget. That page also covers earlier contracts and owner-builders.

An eligible new first home under a contract from 1 May 2025 can receive a full duty concession with no property-value cap. This is separate from the grant's value limit. Citizenship or residency conditions changed for transactions from 1 August 2026; prior ownership and occupation conditions also apply.

Confirm that the property meets QRO's new-home definition and eligibility rules. Registration, legal and other buying costs still need funding. Our Queensland duty guide explains the different concessions.

Eligible buyers can purchase with a deposit from 5% without LMI through a participating lender. The guarantee does not pay part of the price for you. Property caps, borrower eligibility and completion time limits apply. Check the proposed off-the-plan contract with the lender before committing; see our 5% Deposit Scheme guide.

Help to Buy can contribute up to 40% for an eligible new home in exchange for an equity share. A minimum 2% deposit, lender approval and scheme eligibility are required. From 1 July 2026, the taxable-income caps are $103,000 for an individual and $165,000 for joint applicants or single parents and guardians.

This is where the completion date matters. Housing Australia's guidance covers off-the-plan homes where construction has started and settlement is expected within 90 days. I wouldn't build the budget for a project years away around a Help to Buy place. A participating lender needs to check the current timing and eligibility rules. You can't combine it with the 5% Deposit Scheme.

If you're saving through the First Home Super Saver Scheme, check the determination and release steps before signing. That is a separate savings pathway; it doesn't replace the lender's approval or the cash you need for a valuation shortfall.

Keep the developer's updates with your original plans and specifications. If you're asked to agree to a change in price, layout or finishes, send it to your solicitor first so you know what you're accepting.

As completion gets closer, we'll revisit the loan, organise the lender's valuation when it can be done and work out the cash still needed. That gives you a chance to deal with a gap before the settlement deadline.

Arrange a pre-settlement inspection and record the defects. Your solicitor can tell you how the contract deals with them and whether they affect settlement. Finding a defect doesn't always give you the right to hold back payment.

For an apartment, obtain the current body corporate information and compare it with the original budget. Plan moving costs, insurance and account connections too. The buying-cost checklist helps keep these separate from the deposit.