First published 11 Nov 2026, 5:00am
Buying an off the plan apartment comes with a level of risk that can be heightened during a downturn.
One person’s downturn is another person’s opportunity. But does this ring true when it comes to buying off the plan?
While there are benefits to buying off the plan, there are also several risks that are important to consider, especially when buying in the middle of a downturn.
In fact the inherent risks involved in buying off the plan can become particularly pronounced
during a market downturn, Melbourne buyer’s agent Mario Borg says.
This Parramatta apartment sold for $5000 less in 2026 than when it was first sold off the plan in 2015.
The first thing to consider, he says, is what the property might be worth by the time it’s completed.
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“One of the biggest concerns is valuation risk,” Borg says. “A purchaser might commit to buying a property today, only to discover that when construction is completed two or three years later, the property is worth less than the original contract price.
“This can create serious financing challenges, particularly if the bank’s valuation comes in
below the purchase price and the buyer needs to contribute additional funds to settle.”
Records show an apartment in this complex sold off the plan in 2016 for $784,980 before being resold in 2026 for $635,000.
In a volatile economy, where the cost of construction has soared and builders are feeling the pinch, it’s important to consider the financial stability of the developer and builder, Borg says.
Not only are project delays a very real risk, but insolvency on the part of the builder could even lead to the development not reaching completion.
“My view is that buying off the plan involves making a financial commitment today based on
assumptions about tomorrow,” he says. “In an uncertain market, those assumptions deserve considerably more scrutiny.”
Buyer’s agent Mario Borg. Picture: supplied
It’s important to look closely at the purchase price of off-the-plan properties, says Sydney buyer’s agent and managing director of Bought Agency, Bianca Field.
“My opinion is that quite often you are paying an overpriced amount for a property that will
have a lot of catching up to do once it’s completed,” Field says. “Basically you’re paying the
developer’s profit margin, marketing and construction costs wrapped up into that property.”
Depending on the type of development, some properties carry a risk of oversupply, Field says.
“Typically these products are 100 to 200 units and you’re not buying a product that has scarcity.”
This lack of scarcity could affect resale value, she says.
Buyers agent Bianca Field from Bought Agency. Picture: supplied
Since you can’t physically inspect off-the-plan properties, there’s also a risk that the end product won’t be quite what you anticipated.
Field says there could be changes to finishes and layouts as well as the risk of defects, which could result in ongoing expenses further down the line.
While there are plenty of risks to consider when buying off the plan in the middle of the downturn, there could be some benefits depending on how the market plays out, Borg says.
“Market downturns can create opportunities, particularly when developers are under pressure to secure pre-sales, meet funding requirements or clear remaining stock,” he says.
“Purchasers may find themselves in a stronger negotiating position, potentially securing price reductions, upgraded finishes or other incentives that wouldn’t ordinarily be available in a buoyant market.”
Smaller complexes in high demand locations are more desirable.
He says in Victoria, there are stamp duty concessions for some purchases depending on the
property, contract date and other eligibility requirements.
“Another potential advantage is securing a property at today’s price with settlement occurring
sometime in the future,” he says. “If the market recovers during construction, the buyer could
benefit from capital appreciation before settlement.
“However, the reverse is equally possible.”
Accessing finance could be tricky if the valuation comes in short.
Borg says prospective buyers should look at the actual value of the property and its growth
potential, rather than the amount of discount being offered by the developer, keeping in mind the original asking price may have been inflated.
“The ideal scenario is buying a well-designed property in an established, highly desirable
location, from a financially sound developer with a proven track record, at a price that stacks up against comparable established properties,” he says, adding that it’s better to target smaller, quality developments over large high density apartment projects.
Be careful of suburbs where there is an oversupply of apartments Picture: supplied
Field says visit a developer and builder’s previous projects, completed over a 20-year period,
to stack up whether they’re reputable with a proven track record for delivering on time.
“Quite often on the builder and developer’s websites they’ll have a portfolio of all the constructions they’ve completed,” Field says. “You can give any past agents who have sold any properties in those developments a call and ask for their old strata reports.
“Other than that, there’s a lot to be said for going and physically visiting an open home in a
development that has an apartment for sale in it.”
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