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Chronicle (Toowoomba) Saturday 14/06/2014 Page: Section: Region: Circulation: Type: Size:

41 Domain Toowoomba QLD, AU 17392 Regional 577.00 sq.cms.

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Off-the-plan reforms in wind

OOWOOMBA residents buying property ‘‘off the plan’’ will have access to more information than ever before thanks to new reforms introduced in Parliament last week. Toowoomba MPs, Dr John McVeigh and Trevor Watts said homebuyers would find it easier to retrieve important data on things like proposed earth works, the construction of buildings and other structures like retaining walls. “Buyers take a leap of faith when they purchase off the plan, so it’s essential they know as much as they can to ensure they make the right decision,” they said. However one real estate expert and wealth development coach has urged caution. “The building industry in Toowoomba will also benefit from less red tape and regulation, with the removal of duplicated administrative forms which cost businesses precious time and money,’’ Dr McVeigh and Mr Watts said. “Buyers and sellers will also be given the freedom to make agreements on smaller developments without interference from government agencies. “This is a win-win for all Queenslanders and will reduce costs for all those buying and selling property,” The MPs said. Toowoomba home buyers buoyed with confidence about a strengthening local property market, together with the influx of new residential infill development, may be left with a contract they have signed and cannot finance at settlement, according to real estate expert and wealth development coach, Zaki Ameer. Mr Ameer explained that Toowoomba home buyers or investors may be tempted to buy an apartment off-the-plan, or in other words, before construction has commenced, due to hype surrounding the high growth areas they are located in. “Firstly, the major attraction of these properties is that they are located in sought-after suburban areas, often as part of an urban renewal initiative, so there is a lot of attraction around the cultural and entertainment precincts they are in close proximity to,” he said. “Then, developers will further sell the idea

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of buying off the plan, plan saying it will allow them to buy that property for the future at today’s prices, on the basis of developer’s floor plans and the existing site,” he said. According to Mr Ameer, while buyers might be enticed with incentives including a free car parking space, off-the-plan purchases are actually a false economy due to hidden fees embedded within the contract price including marketing fees, as well as commissions payable to all parties involved in the sale of the property such as sales agents, mortgage brokers, financial planners, etc. Mr Ameer is concerned that local buyers are not made fully aware of exactly how much of a gamble they are taking. “Nobody knows for sure what is going to happen in 2 years time, when the property is completed. If the market is rising, yes, you’ll make money, but that’s not because you made money off the property – it’s because the overall market went up.” Focusing instead on tax benefits on depreciation and the delayed settlement, he said home buyers neglect to consider what they stand to lose if, for any reason, the bank values the property at a lower value that what the contract was originally signed for. “The problems arise based on the fact that the property doesn’t get valued by the buyer’s lender until it’s built, and hence the bank won’t provide finance for it until it’s built. So what happens in some instances, especially if the market isn’t particularly warm or the developer has over-speculated, is the property doesn’t end up being valued at the price you agreed to buy it for, and you can’t make the developer responsible because you signed a legal contract saying ‘In one year I want to buy this property for this amount’.” Mr Ameer is concerned that off-the-plan properties are likely to be valued lower than their sale prices over the coming five years due to an over-supply of infill development within the many areas undergoing urban development. The contract still stands, and the buyer has to find the remainder of the money, usually in cash, leading to severe financial trouble. “The other thing that people need to be aware of is that they simply don’t know what the future holds. How do you know what’s

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Chronicle (Toowoomba) Saturday 14/06/2014 Page: Section: Region: Circulation: Type: Size:

41 Domain Toowoomba QLD, AU 17392 Regional 577.00 sq.cms.

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going to happen to you in that one or two year period in terms of personal finances? What if you lose your job or are forced to change it? If your financial circumstances change during the building process, you might not be able to get a loan for the agreed contract price, or indeed, for anything. Yet you still are obliged to honour the contract and there are serious consequences if you can’t.� Mr Ameer encouraged Toowoomba home buyers and investors to rather seek expert advice for their individual situation as there are many great opportunities on the local market right now.

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Profile for Zaki Ameer

Toowoomba chronicle - Off the plan Reforms - Dream Design Property - Zaki Ameer  

Zaki Ameer discusses the concerns of off the plan developments over supplying certain areas such as Towoomba . Founder of Dream Design Prope...

Toowoomba chronicle - Off the plan Reforms - Dream Design Property - Zaki Ameer  

Zaki Ameer discusses the concerns of off the plan developments over supplying certain areas such as Towoomba . Founder of Dream Design Prope...

Profile for zakiameer