Buying off the plan means committing to a purchase before the building exists. The developer's ability to complete the project is not a secondary consideration. It is the most important one.
Here is how to assess developer credibility before you commit.
The iCIRT rating, Independent Construction Industry Rating Tool, is the most structured tool currently available in Australia for assessing developer and builder trustworthiness.
Developed in response to industry concerns about developer failures and building defects, iCIRT assesses developers and builders across six categories: corporate governance, financial resilience, experience, conduct, capability, and delivery. The rating is conducted by independent assessors and is publicly accessible.
A developer with a strong iCIRT rating has passed an independent assessment of their financial position, management quality, track record, and professional conduct. It is not a guarantee of completion, no rating system can provide that, but it is a meaningful signal that the developer has been assessed by independent professionals rather than simply assessed by their own marketing.
Before committing to any off the plan purchase, check whether the developer holds an iCIRT rating and what that rating is. A developer who cannot or will not obtain an iCIRT rating is a developer who has not submitted to independent scrutiny.
A developer's track record is the most honest indicator of their likely future performance.
Questions worth researching before committing:
How many projects have they completed? Were those projects delivered on time and to specification? Have there been significant defect issues in completed buildings? Have there been insolvency events, administration processes, or legal proceedings involving the developer or related entities? What do buyers who have settled in their previous projects say about the experience?
Most of this information is publicly available. ASIC maintains records of corporate insolvency events. Court records show legal proceedings. Google reviews and property forums contain buyer experiences. Building defect reports for strata buildings are obtainable through strata inspection.
A developer with a long track record of on-time, to-specification completions across multiple projects in multiple market cycles is a very different risk profile from a developer launching their first or second project.
This is harder for individual buyers to assess but it is worth attempting.
The collapse of Bathla Group intensified scrutiny of the developer's heavy reliance on private credit to finance its projects. Developers who are heavily reliant on private credit, often at higher interest rates than bank debt, are more vulnerable to market downturns because their financing costs are higher and their lenders are typically less patient during periods of difficulty.
Developers with pre-sales sufficient to secure bank construction finance, or with equity backing from established institutional investors, are generally in a more stable financial position than those relying primarily on private credit or presales alone.
Most buyers cannot access detailed financial information about a developer's balance sheet. But you can ask questions. Who is financing the construction? Has a construction loan been secured? What pre-sales percentage has been achieved? Is there institutional backing behind the project?
A developer who cannot or will not answer these questions is not a developer who is instilling confidence.
The deposit protection question is separate from the developer viability question but equally important.
Understand exactly who will hold your deposit in trust, under what legal obligations, and what independent oversight exists. An independent regulated trust account platform with real-time reporting and institutional bank backing provides stronger protection than a deposit held by the developer's own solicitor with no independent oversight.
Coposit's deposit management platform Ammoze holds buyer deposits in regulated trust accounts established with Commonwealth Bank, NAB, and Westpac, completely independent of the developer. Real-time notifications and monthly reports provide ongoing visibility. The developer has no access to Ammoze-held funds.
A project that is already under construction with strong pre-sales has a very different risk profile from a project in early presales with construction finance not yet secured.
Projects under active construction with high pre-sales percentages have already cleared several of the most significant risk hurdles. The developer has secured finance. Construction has begun. Buyers exist who have committed to settlement. The project has momentum.
Projects in early presales are riskier, not because early presales are wrong, but because they represent a longer time horizon during which market conditions, developer finances, and construction costs can all change.
ERA Newcastle at 124 Bull Street, for example, has construction underway with over 50% of residences sold and is backed by LDI for additional buyer security, a risk profile that is meaningfully different from a project in early presales with construction finance not yet confirmed.
Does the developer hold an iCIRT rating and what does it say? How many projects have they completed and what is their track record? How is the project financed and by whom? How will your deposit be held and by whom? What is the current pre-sales percentage and construction status? Does the project have any institutional financial backing?
These questions do not guarantee a successful outcome. But they are the questions that separate an informed off the plan purchase from an uninformed one.
Browse current Coposit listings on the projects page, download the Coposit app, or contact the Coposit team to understand how developer selection and deposit protection work for specific Coposit projects.
This article is general information only and does not constitute financial or legal advice. Always seek independent advice before making any property decisions.
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