Australian Property | The Costs of Buying Off-the-Plan Property in Australia (2022 Update)
1. Reserve a property
Once buyers have chosen a property they are happy with, they pay a good-faith deposit (usually A$1,000 – A$5,000) so the agent can request the developer to hold that property for them. If the buyer changes their mind before the contract is signed, this good-faith deposit is refunded in full; if the contract is signed, it forms part of the deposit. For overseas buyers, Aobo Realty will assess financial capacity in advance to determine the type and price range of property that can be purchased.
2. Sign the contract
The developer provides the purchase contract to the buyer or the buyer's solicitor. The buyer signs after consulting their own solicitor and fully understanding the contract; at the same time, the developer must also sign the purchase contract and provide the buyer with a copy signed by both parties, at which point the contract takes effect.
3. Apply for FIRB approval
For some developments that have not obtained FIRB approval, overseas buyers submit a purchase application to the Foreign Investment Review Board (FIRB). This step applies only to overseas buyers. The buyer must complete an application form and submit it to the FIRB for review, a process usually assisted by the buyer's solicitor.
4. Pay 20% deposit
The buyer must pay 20% of the purchase price as a deposit within the time specified in the contract (usually 14 calendar days). This deposit must be paid into the trust account of the developer's solicitor. Any interest generated while held in this trust account generally accrues to the buyer and is settled to the buyer at settlement. The developer cannot access the deposit before the property settles, fully protecting the buyer's interests.
5. Construction
During this construction period, the buyer does not need to pay any further costs.
6. Home loan preparation
Three months before handover, Aobo Realty will assist clients with the preparation and application of their loan documents.
7. Final inspection
Once the property is completed, the developer will invite the buyer or the buyer's representative to inspect it. Any issues found during the inspection will be recorded, and the developer will then arrange rectification. Should any problems arise within three months of settlement, the developer will also be responsible for prompt repairs. At the same time, the developer registers the title for the project.
8. Warranty and maintenance
The quarterly Body Corporate Fee already includes building insurance, so no separate payment is required. The indoor fixtures covered here include the dishwasher, oven, rangehood and cooktop, all of which carry a three-year manufacturer's warranty and a two-year government mandatory warranty, giving a total warranty period of five years.
9. Settlement
On the day of settlement, the buyer pays the remaining balance of the purchase price (excluding the loan) to the developer. The buyer's solicitor completes the final settlement formalities with the developer's solicitor, holding the contract and the funds. The buyer can then move into their new home. For overseas buyers who require it, there are professional property management agencies in Australia to manage the property, including leasing and maintenance.