06/07/2026
Before You Sign: The Real Risks of Buying New and Off-the-Plan Property
By Richard Le β Richard Property Adviser (RPA)
Walk through any display suite on a weekend and it's easy to see the appeal. A glossy render of a brand-new apartment, a friendly salesperson, talk of stamp duty savings, tax depreciation and "getting in early" before prices rise. For a relatively small deposit today, you're promised a beautiful finished home β or a tidy profit β two or three years down the track.
I understand why it's tempting. But in more than a few of the deals I've reviewed for clients, the finished reality looked very different from the brochure. Buying off the plan means committing to a property that doesn't exist yet, based on drawings, specifications and promises. That gap between what you're sold and what you eventually receive is where the risk lives.
This isn't about scaring you away from every new property. It's about making sure you walk in with your eyes open, so the decision is a strategic one rather than an emotional one.
Why off-the-plan is marketed so hard?
The pitch usually leans on a few genuine-sounding benefits: reduced or deferred stamp duty in some states, generous depreciation deductions on a brand-new build, a "lock in today's price" story, and a low deposit that supposedly lets a small amount of cash grow into real equity by completion.
Some of those benefits are real. The problem is that they're often the only things you're shown, while the risks β which are substantial β are quietly left off the page. A tax break can make a good asset a little better. It cannot rescue a bad one. So let's talk about what the brochure leaves out.
1. The valuation gap at settlement β the risk that hurts most
This is the one that catches people out, and it's the most financially dangerous.
You agree on a price today. But your lender doesn't value the property until it's built and you're ready to settle β often two to three years later. If the bank's valuation comes in below the price you contracted to pay, the bank lends against the lower number, not your contract price. You have to make up the difference in cash.
In softer markets, this has happened to a large share of new-apartment buyers, with completion valuations landing well under the original purchase price. If you contracted at $700,000 and it values at $630,000, you may need to find tens of thousands of extra dollars at the worst possible moment β or risk losing your deposit entirely. I've seen buyers lose their deposit over exactly this, and some have been pursued for the shortfall on top.
2. Your finance is a moving target
A pre-approval is not a guarantee, and it certainly won't stretch across a multi-year build. Approvals typically lapse after around 90 days, so the loan you rely on has to be re-assessed under whatever conditions exist at settlement β not the ones that existed when you signed.
Over two or three years, a lot can move against you: interest rates rise and shrink your borrowing capacity; lending rules tighten; or the lender simply becomes cautious about a particular postcode or building type. The amount you can borrow at settlement may be far less than you assumed on signing day.
3. Your own life can change
The settlement date is a long way off, and you change too. A new car loan, a credit card, a business expense, a period between jobs, a reduced income, or a dip in your credit file β any of these can lower your borrowing power right when you need it most. You're being assessed on your circumstances at settlement, not the healthy financial position you were in when you signed the contract years earlier.
4. Market timing you don't control
Because completion is years away, the market can turn while you wait. You've effectively locked in a price and handed the timing risk to the calendar. If values in that pocket soften β or if a wave of new supply hits the area at once β you could own something worth less than you paid before you've even received the keys.
5. The developer might not make it
If the developer runs into trouble or goes under before completing the project, your build can be delayed indefinitely or abandoned. Deposits held in a proper trust account are usually protected, so you may get your money back β but you lose the years, the opportunity cost, and the better properties you could have bought in the meantime.
6. Delays are the norm, not the exception
Construction almost always takes longer than promised, and the timeline is entirely out of your hands. Delays can throw out your finance, your living arrangements, your rental plans and your whole strategy β and there's very little you can do but wait.
7. Sunset clauses can work against you
Most off-the-plan contracts contain a "sunset clause" β a long-stop date by which the project must be finished. In a rising market, some developers have used delays to trigger these clauses, cancel contracts, and re-sell the same properties at higher prices. The clause that's meant to protect you can be turned around to your disadvantage if the contract isn't reviewed carefully.
8. What you see is not always what you get
A render is an artist's impression. The finished product can disappoint in ways that are hard to picture from a floor plan: smaller-feeling rooms, cheaper fittings than expected, thin internal walls that carry noise, a different outlook, or quality that simply doesn't match the marketing. In recent years, well-publicised structural defects in some new towers have shaken confidence in the sector and left owners with major repair bills and unsellable apartments.
9. You may be paying for the marketing
Here's what rarely gets mentioned: the price of many off-the-plan properties includes a hefty marketing commission paid to the selling agent β sometimes in the range of 5β6% of the value, occasionally more. That cost is baked into your purchase price. In other words, you can be paying a premium for the privilege of taking on all the risks above, rather than receiving the discount that the risk really warrants.
10. Oversupply and ongoing costs
New apartments often arrive in clusters, and areas that see a flood of similar stock can suffer oversupply β which drags on both resale values and rents. On top of that, strata and body corporate fees on new complexes (especially those with lifts, pools, gyms and lobbies) can be far higher than buyers expect, quietly eroding your returns year after year.
So how do you protect yourself?
None of this means new property is always the wrong choice. It means the decision deserves genuine scrutiny, not a signature on the day. Before you commit:
Have the contract reviewed properly β sunset clauses, finance conditions, defect and completion provisions, and the developer's track record all matter.
Stress-test your finance for higher rates and a lower valuation at settlement, not just today's numbers. Ask yourself: if it values 10% under, can I still settle?
Understand the true price by comparing it against established properties nearby β and factor in the marketing premium you may be paying.
Check the supply pipeline in that pocket. How many similar units are coming, and when?
Read the strata budget and sinking fund before you fall in love with the render.
The buyers who get hurt are almost always the ones who moved fast and trusted the brochure. The ones who do well are the ones who slowed down, asked hard questions, and had someone independent in their corner.
Where RPA fits in
At Richard Property Adviser, I work for the buyer β never the developer and never the selling agent. That means when I look at an off-the-plan or new-build opportunity, I'm asking whether it genuinely fits your long-term plan, what could go wrong at settlement, and whether there's a smarter, safer way to reach the same goal.
If you're weighing up a new or off-the-plan property β whether as your home or an investment β talk to me before you sign, not after. A short conversation now can save you a very expensive lesson later.
Richard Le β Richard Property Adviser (RPA)
π 0403 239 789
βοΈ [email protected]
This article is general information only and does not take into account your personal circumstances. It is not financial, legal or tax advice. Please seek advice tailored to your situation before making any property decision.
Attached article about off the plan issues:
https://www.abc.net.au/news/2026-06-21/troubled-plans-for-sth-bnk-skyscraper/106818926
