Buying a home off the plan

Key points

  • Buying a home off the plan means buying a property that has not yet been built. You choose your design from a small range of options provided by a developer, agent or builder.
  • Buying off the plan can be a cheaper way to buy your own home. However, your design options may be limited.
  • There are various changes you can make to the basic design to improve your home’s thermal performance and comfort and reduce its environmental impact. Some can be made easily at no or low cost, and some may cost more and require negotiation.
  • Easy changes include reversing or rotating the plan, changing window sizes or adding adjustable shading. More significant changes include adding thermal mass or a solar photovoltaic (PV) system.
  • Make sure you do your homework, know what you are looking for, and get any adjustments in writing before you sign a contract.
  • Look for a reputable builder with a good track record.

Understanding buying a home off the plan

Buying off the plan means that you agree to buy a home that is yet to be built. The plan is usually offered by developers or builders who engage designers to prepare a range of designs that suit the location and market they work in. Instead of looking at a physical property, buyers can view the design and building plans, including 3D renderings and architects’ sketches, to make their decisions.

Buying off the plan often allows homebuyers and investors to purchase property at a lower price than a completed home. When you buy off the plan, you agree to a set price even though the cost of the build might increase during the time it takes to construct the home.

This sort of volume housing also typically costs less per square metre than a custom-designed and built house. Floor plans vary, but they are designed and built to a formula that reduces risk and allows economies of scale for trades, construction systems, and materials supply chains. This approach can be cost effective, but it can also limit your choice of construction system and materials.

Some companies use similar designs and construction systems in every climate zone which may limit their suitability for your climate.

This section looks at buying a home or apartment off the plan. For more information on buying an existing apartment refer to Buying an apartment.

Tip

Look for companies that specialise in climate-responsive design for your region. Many now offer sustainable features including 7- and 8-star thermal performance, advanced glazing, solar hot water or heat pumps and efficient heating and cooling systems.

Carefully assess the home to see if it suits your needs, will deliver long-term comfort and considers sustainability principles. Make sure that you are dealing with a reputable builder and ask lots of questions about what is covered by the purchase price and what is not. Ensure that your contract includes a sunset clause, which requires the project to be completed by a particular date or within a specified timeframe.

An aerial view of a new suburb shows rows and rows of homes intersected by roads and trees.

Homes off the plan may be apartments or stand-alone houses

Photo: Getty Images

Preliminary research

Your research and the decisions you make now will influence how well your home suits your lifestyle, how cost effective it is to run, and how sustainable it is over the longer term.

The advice below provides some specific tips for buying a home off the plan.

Preliminary research gives a more detailed description of this stage.

Decide on your budget

Your budget should include the total amount you want to spend, and the amount you want to spend on sustainability features.

Prices advertised by developers and builders can indicate probable cost, but take care. Make sure that your builder’s allowance takes into account the cost of better design features that save money in energy, water, and maintenance bills in the long term. Also make sure that you have taken into account additional costs, including:

  • preliminaries – plans, council approval costs, geotechnical and engineering certification, surveyor’s fees, insurances, bank and legal fees
  • inclusions – additional features or quality you request that are not covered in the base building costing
  • site allowances – which may include safety fencing, sediment barriers, excavation (slope), drainage (overland stormwater flows), or stronger footings to accommodate reactive foundation material identified by the geotechnical survey
  • variations – charges for changes you make after signing the contract, which are often very expensive.

Shortlist builders

Check the credentials of the company before choosing your builder:

  • Establish how long they have been in business and how many homes they build.
  • Ensure they are experienced in your region, climate, and council area.
  • Inspect some finished projects to check for quality and attention to detail.
  • Get references and speak to past customers.
  • Check their licence and complaints history with your state or territory building regulatory authority.

Choosing a site

Choosing your site before choosing your plan is usually best. Look for:

  • location – Does the location meet your needs? Is it safe, close to shops, schools, and reliable public transport? Does the development have pleasant community spaces like parks, gardens, cycleways, walking paths and playing fields?
  • slope – If you are buying a free-standing home, level or minimum slope sites generally allow better outcomes at lower cost because they are suited to slab-on-ground construction with minimal excavation.
  • orientation – Good orientation is a free or low-cost way to lock in better thermal performance for the lifetime of your home.

Small children are enjoying time on play equipment in a park.

A playground can increase the amenity of your community

Photo: Getty Images

Choosing a design

Floor plans

First, look at the potential floor plans to compare your ‘must haves’ and ‘wish list’ with what is on offer in your price range:

  • Size – Think carefully about how much space you really need. It is tempting to want more area for your money but bigger is not always better. You will have more house to heat, cool, light, clean, and furnish — and more energy and upkeep costs now and into the future.
  • Star rating – The Nationwide House Energy Rating Scheme (NatHERS) star rating simulates heating and cooling energy use per square metre, so must be considered in conjunction with house size. A large home with a 8-star rating may require more heating and cooling energy to stay comfortable than a smaller 7-star home. Aiming for the highest NatHERS thermal comfort star rating you can afford improves both thermal comfort and resale value. The National Construction Code sets minimum requirements for buildings in Australia, including a minimum star rating for thermal performance and a Whole of Home annual energy use budget for homes. The Whole of Home energy use budget is based on the estimated amount of energy required to operate the home, taking into account it's thermal performance, major fixed appliances such as heating and cooling and hot water systems, and on-site generation and storage.
  • Thermal comfort – Check what is needed in your climate to achieve good thermal comfort in your home with minimal use of additional heating and cooling. Compare the climate design list with what is on offer.
  • Layout and space – Furnished floor plans help you to visualise how you might live in the available space. Is furniture drawn at the correct scale? Check that yours will fit by obtaining an accurately scaled furnished floor plan and measuring your furniture against it.
  • Storage – Clever storage can make a compact home feel and function like a much larger one. Visualise where you might store your belongings in the cupboards shown on the plan. Ask the builder to estimate the cost of providing additional cupboards if needed and suggest where these might be located.
  • Glazing – Assess the placement, style, and efficiency of windows. See whether the design can be adjusted to improve daylighting and thermal performance.
  • Water use – Most builders provide a ‘schedule of allowances’ for taps and plumbing fixtures. Make sure you choose the highest Water Efficient Labelling Standards (WELS) star rating available — especially for showers and toilets for reducing water use.

A low-flow shower head pictured with water flowing.

Water-efficient showerheads save water and energy

Photo: Getty Images

Inclusions

The volume housing process usually requires that you nominate all your needs before signing a contract. You will not be able to make decisions throughout the construction process as you do in a custom design and build.

Things generally move very quickly with a plan home build and there is so much to think about — it is easy to miss critical details. Construction timeframes vary, but from signing a contract to moving in can take as little as 6 months.

Make sure that you have done your research well in advance, and know what you want before signing. Keep in mind your ‘must haves’ and your ‘must avoids’. Prioritise features that cost less over the home’s lifecycle, add to quality of life, and reduce environmental impact.

Negotiating changes

Many developers and builders will make small changes to a standard plan to achieve better orientation or thermal comfort at no or low cost, such as:

Other simple changes may add cost but improve the thermal comfort of your home:

  • using more efficient glazing options
  • installing adjustable shading devices to east and west
  • increasing standard insulation levels
  • using efficient lighting (for example, LED)
  • using efficient appliances with the highest available star ratings
  • using plumbing fixtures with the highest available WELS star ratings
  • exposing thermal mass (for example, using tiles or polished concrete instead of carpet)
  • using materials and finishes with low environmental impact

Depending on what is offered in your base package, you may also need to negotiate more significant upgrades that may add upfront cost but significantly reduce lifecycle costs and add value:

Negotiating changes to a home off the plan

A study in 2019 by the Cooperative Research Centre for Low Carbon Living identified the financial costs and benefits of upgrading typical display home designs in Melbourne, Townsville, Canberra, and Perth to net zero emissions standard. Doing this added 6–11% to construction costs, but reduced annual energy costs by around 88%, around $1750 per year. Most major efficiency gains came from the additional insulation, increased shading, glazing upgrades and energy-efficient appliances, such as induction cook tops and air source heat pumps, with only a small 3–4 kW photovoltaic (PV) system required.

The research shows net zero energy housing can be achieved when homebuyers negotiate with their builder about energy-efficiency upgrades. A 4-part video series follows the journey of building net zero energy display homes and mainstreaming these practices in the industry (refer to References and additional reading below).

The SJD Homes Z-Range display home in Officer, Victoria is designed to run exclusively on electricity, with energy consumption fully offset by renewable energy generated on-site.

Several volume builders are now building net-zero energy homes.

Photo: The Zenith by SJD Homes (© SJD Homes)

Final quotation and contract

When you have decided on a site and have narrowed your choice to 1 or 2 plans, you are ready to ask for final quotations with a detailed schedule of finishes that will form the basis of your contract.

Tip

Quotations should include all the inclusions and contingencies, with the budget and any variations or changes negotiated. Ask your builder to nominate, in writing, any items excluded from their price.

Make sure you receive legal advice, and approval from your lending authority, before signing a contract. Attach to the contract copies of:

  • the quotation (including all costs)
  • council-approved plans and specifications (if available)
  • surveyor’s report
  • geotechnical report and engineering certification details
  • schedule of works including a fixed completion date and schedules of allowance for every inclusion or variation.

If council approved plans are unavailable, contracts may be drafted to include clauses that allow you to withdraw if council conditions add to cost or adversely alter expected performance outcomes.

For more information about the construction process, visit Building a home.

References and additional reading

Learn more

Authors

Original author: Chris Reardon 2013

Updated: Department of Industry, Science, Energy and Resources 2020, and Department of Climate Change, Energy, the Environment and Water 2023