Off-the-plan apartment pricing: Why the earliest buyers save big
Original Article: Juliet Helmke, Realestate.com.au, “Off-the-plan apartment pricing: Why the earliest buyers save big,” first published 24 March 2025
When it comes to buying off-the-plan, the old saying rings true: the early bird catches the worm.
Waiting years for an off-the-plan apartment to be completed might put some buyers off. When you’re ready to buy, you’re often also ready to move, and the prospect of killing time in between those milestones can serve as a major deterrent.
But in fact, it’s the patient buyers who are prepared to wait the longest who often get the best prices.
Why? A lot of it has to do with how developers finance their projects, which impacts their sales goals at different points of construction.
As David Milton, CBRE’s managing director of residential projects in Australia explained, “most residential projects require pre-sales for bank funding”.
What that means for a developer, is that the first sales are vitally important for attaining the financing that allows the whole project to be completed.
In light of that, developers are often motivated to secure those pre-sales and will price apartments attractively to get the first purchases locked in.
Samuel Gardner of Gardner Vaughan Group, a Queensland-based developer, provided more insight into what that timing looks like from a construction standpoint.
“Usually it’s after the first four months of construction that you then go and draw on your development funding facility. So in that time leading up to construction, plus four months into construction, you’re selling off the plan to achieve pre-sales.”
For would-be buyers that might want to take advantage of early incentives, they should be looking at developments that have not yet or barely broken ground.
But the moment the pre-sales target is hit, as Mr Gardner explained, “everything cools down”.
“We tell the agents to take the foot off the throttle,” he said.
Through the rest of the construction phase, the sale price will likely increase.
This is not only due to trying to align the price with demand, but also due to fluctuating market factors.
Market impact
As Mr Milton explained, while early buyers do often get “better buying opportunities early on,” price escalations in off-the-plan apartments are also due to the simple fact that these projects take a long time to construct, and over that time, the market changes.
He advised buyers who purchase closer to completion to take a range of factors into consideration when assessing how much a price has changed since the apartments first went up for sale.
“Yes, you might be buying at a higher price than the original, but it’s probably two years later, so the market might have moved substantially,” he said.
But Mr Milton also highlighted that market factors can work in the favour of those earliest buyers – adding another incentive for early buyers.
An off-the-plan apartment “could be worth 10% or 15% more in value at the time [a buyer] settles,” depending on market changes, he explained.
That’s important because a lender will revalue the property for finance purposes just prior to settlement, which will occur when the property is complete.
“So if you bought something for $800,000 and you’ve signed a contract off the plan two years prior, and now it’s worth $900,000 you’ll get a valuation of 900,000 so that’s improving your equity,” Mr Milton explained.
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