Guide To Buying Off The Plan In NSW

Introduction

Buying off the plan in NSW can be an exciting opportunity to secure a brand-new property before it’s even built. You get the chance to lock in today’s price for tomorrow’s home, but purchasing off the plan is not without risk and it is important to understand these before you sign.

In this article, I will break down this process and walk you through what it really means to buy off the plan, the latest legal changes in NSW, common risks involved, and how you can protect yourself.

What is ‘buying off the plan’?

When you buy off the plan, you’re agreeing to purchase a property based on plans and designs, before the final product is finished or even started. Under the Conveyancing Legislation (Amendment) Act 2018 (NSW), off the plan property is defined as a contract for the purchase of a residential lot (although commercial properties can be off the plan as well), that doesn’t yet exist when you sign the contract.

Essentially, you are buying a promise of the property you’ll one day own, based on draft documents.

Buying off the plan can have big benefits. You can often secure the property with a smaller deposit (usually 5%), and there’s potential for the property’s value to increase while it’s still under development. Where you are buying both the land and dwelling, you will be able to access modern, energy-efficient designs and the peace of mind of building warranty.

In the 2023/2024 financial year, more than 5% of residential purchases in NSW were off the plan, and that number is steadily growing. But before you decide if off the plan is for you, it’s important to understand the extra risks that don’t apply to contracts for established property and how these might affect you throughout the process.

Buying off the plan vs established

Understanding the differences between purchasing off the plan and buying an established property helps you to determine which option fits you and your needs best.

Let’s walkthrough the key features of both options.

Off the plan

1. You are purchasing based on draft plans and specifications.
2. You usually only require a 5% to 10% deposit to secure the contract, with the balance not due until completion, which can be much later.
3. There will generally be a significant timeframe between signing and completion, ranging anywhere from 6 months to 4+ years.
4. There is potential for capital growth before settlement. The purchase price may end up being much lower than the actual value of property by the time registration occurs. 
5. Because the development is subject to construction, lodgement and registration with third parties, this can cause delays to completion.
6. The timing of an off the plan project creates increased risks and potential for delays between signing and settlement.
7. Finance is not able to be unconditionally secured until registration is finalised. 
8. Draft plans and specifications are often subject to change between payment of deposit and registration, including, numbering, position, size and restrictions on title.
9. New builds have the benefit of no history, and you will have building warranty once completed.
10. It’s hard to determine exactly what the property will look like; it may end up different to what you thought. 

Established property

1. You purchase the property ‘as is’ based on inspection of the property at the time. 
2. Standard contract terms see you enter into possession and ownership of the property within 42 days after exchange.
3. You can likely live in the property shortly after signing.
4. The purchase price and value stay the same (initially).
5. Settlement (generally) not subject to construction, lodgement or registration.
6. There are reduced risks due to a shorter timeframe between signing and settlement.
7. Finance can be secured early.
8. The property is required to be provided in the same state (excluding fair wear and tear).
9. You have the ability to know what you are getting from the start of the process.
10. The property has a history, risks of pest and building defects. You need to undertake inspections to check if these are present.

Changes to buying off the plan contracts in NSW

Over the past few years, the NSW government has strengthened the current legislation to give buyers better protections. Key reforms include the Conveyancing Legislation Amendment Act 2018 (NSW), the Conveyancing (Sale of Land Act) Amendment Regulation 2019 (NSW)and more recently the Strata Schemes Legislation Amendment Act 2025 (NSW).These changes mean developers are more accountable to you and ensures there is more transparency throughout the project. 

So how do these changes affect you?

The NSW Government is also reviewing further changes, which may include:

1. Mandatory sunset clauses: so you (and the vendor with your consent) can withdraw if a key event doesn’t occur by the due date.
2. Limits on extensions: to stop developers from unfairly delaying projects and keeping you locked in long after the expected completion date.
3. Progress disclosure: to keep you informed on construction milestones, so you’ll be ready once registration takes place.
4. Increased developer obligations: to take reasonable steps to reduce unnecessary delays.

Risks of buying off the plan in NSW

While buying off the plan has its advantages, you need to consider the risks too. Knowing these upfront can save you money, time and stress. 

Market fluctuations

Between signing and settlement, property values can change. If the market drops, you could end up paying more than your property’s market value, making finance harder to secure.

Financial risks

Because settlement can take years, banks will not issue unconditional approval until closer to completion and developers are hesitant to make completion conditional on you obtaining that approval. I always recommend that my clients plan ahead, monitor their borrowing power, and stay in touch with their lender.

Developer insolvency or delays

If the developer goes under or runs into problems, your project may be delayed or even cancelled. On average, apartment completion times in NSW now sit at an estimated 2.5 years, this is the slowest they have been in over a decade. Always research the developer and check their past projects and reputation before signing.

Contract variations

Developers often have a broad discretion to make changes to the project between signing and completion. Things like shifting boundaries, reducing lots size, altering materials, or adding easements are within the power of a developer. Even small changes can affect the property’s value or your use of it. That’s where I come in, I’ll identify what the contract allows and what your rights are if changes occur and ensure that you are comfortable with proceeding on that basis.

Limited inspection opportunities

Unlike buying an existing home, you cannot walk through your property before signing. You are often entirely reliant on plans and specifications, so it’s vital that the contract is detailed and clear. I’ll work with you to check what’s promised on paper matches what you’ll receive and that if any changes occur, how that will affect things, making sure you understand what you are getting at the end.

Tips on how to buy off the plan in NSW

Here are my tips to help you avoid common pitfalls when buying off the plan:

Engage an experienced lawyer

Before signing, you should have a lawyer, review your contract. I’ll walk you through every clause, highlight risks, and explain what can and can’t be changed and negotiate any terms which unfairly impact you. My goal is to protect you all the way from signing to settlement.

Ask the right questions

Before you commit, make sure you can answer the following:

• What exactly am I buying?
• What are my rights if there’s a delay?
• Can the developer vary or rescind the contract?
• What happens if the plans change?
• Are there restrictions or easements on the title?
• What stage is the development at, and when is completion expected?
• Are there any obligations on me following completion?

Review the disclosure statement carefully

Take time to review the finishes, layout, car spaces, and inclusions. If there’s a display suite, I recommend you go see it! You’ll get a much clearer sense of what you’re buying.

Get finance pre-approval and stay updated

Keep your pre-approval current and touch base with your broker or bank regularly. That way, you’re ready when registration happens and won’t be caught off guard by lending changes.

Monitor construction progress

Stay informed. I’ll help you keep track of updates and identify if something seems off. The earlier you spot a potential problem, the more options you’ll have.

Do a detailed pre-settlement inspection

Before settlement, check the finished product carefully. Compare it against your contract, note any defects, and request fixes before completion.

If you’re buying vacant land, you should still inspect it. Especially the layout, service connections, and check any easements. If you’re planning to build, bring your builder along to confirm everything matches your expectations.

Closing

Buying off the plan in NSW can be a fantastic way to secure your new home or investment, but make sure you understand the process and your rights. With ongoing legal reforms improving consumer protection, now is a great time to buy, but it’s still vital to have the right legal support.

If you’re thinking about buying off the plan in NSW, get in touch with Turnbull Hill Lawyers today to discuss how we can help you.