Buying into a new development on an off plan basis offers significant financial and lifestyle benefits, according to Ashley Larter, a property professional with Seeff Hout Bay.
The starting point for any potential purchaser is always to ensure they invest in a credible development which is backed by the banks and marketed by a reputable real estate agency brand.
When you buy off plan, you are buying into a development which has not yet been built, hence you are investing in the developer’s vision and artist impressions of what the property and development will look like.
These are usually in the form of sectional title apartments or townhouses, or freehold homes in a gated estate.
The purchaser is required to enter into a contract and will need to pay a deposit with the balance of the purchase price payable in "draws" during the various stages of the build.
Larter says further that there are significant benefits to getting in early and buying off plan. The first being that you get a brand new home with modern finishes that you can move into with almost nothing to be done. There is often a choice of layouts and finishes so that you can customise it to your own taste preferences.
Although options differ, the purchaser does not have to design and build the property themselves. The costs are also fixed upfront and there are no hidden costs or escalations which are often characteristic when building your own home or renovating.
If you are investing in a new complex or gated estate, you will benefit from the security on offer as well as the benefits of the management of the complex or estate including maintenance of communal areas. Architectural guidelines and management also usually aim to maintain the integrity of the development and enhance its appeal resulting in positive capital value growth.
New developments also often come with added lifestyle benefits and modern amenities such as eco or green features including solar heating, greywater systems and so on. Fibre-readiness may also be a feature.
Buying from a developer also offers warranties and the protection of the Consumer Protection Act which does not apply when buying from a private seller. These include the right to have “snags” rectified within 7 to 14 days of occupation.
Within 12-months, the homeowner can also instruct the builder to repair issues pertaining to workmanship and design materials. The homeowner also has a 5-year period within which the builder can be instructed to rectify major structural defects caused by non-compliance with technical building standards.
The costs of acquisition are also lower as there is no transfer duty payable, and VAT is included in the purchase price. The upfront investment is usually around 10% of the purchase price. Commonly, the purchaser will then pay amounts in segments during the construction process.
There are often special finance packages with plot and plan home loans available offering up to 100% of the purchase price. A notable benefit is that bond payments only commence after construction is complete.
The timeframe offered by developments offer purchasers extra time during which they can save and get their cash flows and budgets in order before occupation of the property and repayments kick in.
There are often also capital gains to be had soon after occupation. Bear in mind that when you buy off plan, you are investing at today’s price and chances are that once you take occupation, the property will be worth more, especially in a rising market.
Depending on the area, new developments are often also sought-after for rental properties and usually achieve higher rents compared to older properties which makes these excellent rental investments.
The new Applegarth Estate
One such opportunity to invest early is the new Applegarth Estate located just two minutes from Constantia Nek which offers a significant off plan investment opportunity, he says.
It is being developed as a top class security estate with luxury homes located in an eco-friendly environment which includes wetland areas, beautiful mature trees and award-winning landscaping. The plots are north-facing. Sizes range from 650sqm to 1047sqm arranged around a lush greenbelt and up onto the ridge with uninterrupted views across the valley.
There is a choice of architectural designs in single and double storey options with three to five bedrooms. Buyers can also use their own builder and architect with generous timelines in place. A significant added benefit is that it is the first development to offer the right to erect double dwellings.
Applegarth offers exceptional value for money with plots on offer from R1.695m and plot and plan options from R4.995m, inclusive of VAT (Value-Added Tax) with no transfer duty payable.
Contact Seeff Hout Bay, Ashley Larter (083 235 1049, Ashley.larter@seeff.com) and Lauren Zuidema (079 529 6275, lauren@seeff.com).
Related Articles
