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Buying Property While Saving For A Deposit

By Coposit
3/1/2023

There are two types of home buyers out there, some prefer snapping up an existing home, while others buy off-the-plan. The question is, which one are you? To be fair, Australians are spoilt for choice when it comes to choosing a home. It’s crucial to take everything into account especially now more than before as home prices have been on an upward haul with interest rates skyrocketing. Here’s a mini guide to help you make the right decision in your home ownership journey.

Customising your ‘Home Sweet Home’

Buying off-the-plan gives you the opportunity to customise your home to your exact specifications. You have the chance to work with the developer to choose from a range of finishes and fixtures to ensure that your home is tailored to your unique tastes and preferences. This is not possible when purchasing an existing home, which may have outdated features or designs that do not meet your needs.

Everyone has a vague image of what their ‘dream home’ looks and feels like. Whether you’ve acquired the taste from an interior designer, or bookmarked Pinterest suggestions, it’s worth living in a space designed by the occupant, you.

Existing homes are limited in this capacity. If you want to make changes, you’ll need to undertake renovations, which is both costly and time-consuming. Save yourself the hassle and opt for an off-the-plan instead if you’re looking to customise your own space.

Let’s talk about Finances

If you are looking at off-the-plan homes, you will notice there is seldom room to secure a lower purchase price. Developers may offer incentives such as rental guarantees, stamp duty savings, discounted lender’s mortgage insurance or reduced deposit requirements if they are working with Coposit. This may encourage buyers to go for an off-the-plan home if an existing home doesn’t come with such incentives. What does this mean for you as a potential buyer? This will help you from breaking your bank and making your dream home more affordable.

A huge barrier Australians face when buying homes is saving for a deposit. This has been an age-old issue for first home buyers to downsizers. The good news is, there are fee-free platforms fast tracking home ownership by helping pay the deposit in weekly instalments as your home is being built rather than all in one go. If you’re eyeing an off-the-plan property, make sure it’s listed with Coposit, this way you can say goodbye to waiting years saving up for a deposit and instead look into buying sooner. Unfortunately, existing homes don’t offer such incentives as they are already built and need the deposit to be paid upfront.

A plus side of considering an existing home is the capital growth. As you decide to buy, explore the suburb in detail. You can research into whether the value of the property will increase, and the types of homes being built around the property. This will give you an understanding of the rental yield you can expect if you’re looking to make it an investment option. An off-the-plan doesn’t have this benefit since it’s a home being built, making it hard to get an estimation of its value post construction.

In general, buying off-the-plan and existing homes both have their fair shares of pros and cons. Customizing your home, pocketing big savings and taking advantage of potential home appreciation over time are key considerations and moreover benefits that come with buying off-the-plan. While of course there are risks and challenges associated with buying off-the-plan, working with a reputable developer and doing your due diligence can help you to navigate these challenges and enjoy the many benefits of this approach to home buying.

Coposit is an interest and fee-free payment platform which lists properties available with as little as a $10,000 deposit, while you save up for the rest as your off-the-plan home is being built.

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