If you are considering off the plan, we encourage a careful financial comparison to buying established property.

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At Peritum Property, we advise our clients to look toward established homes rather than buying off the plan. While we understand the initial appeal of a brand new build and the potential tax incentives, our primary goal is to ensure our clients enter into a purchase with the highest level of certainty and the best prospects for long term growth.

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We don’t recommend off the plan opportunities because they introduce variables that are difficult to control. Instead, we focus on assets where the value is transparent and the risks are manageable from day one.

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1. The Land to Asset Ratio

The most consistent driver of long term wealth in the Melbourne market is land. Land is what appreciates over time, while the building itself is a depreciating asset. In many off the plan developments, a significant portion of your purchase price covers the developer’s profit margin and the high cost of modern construction rather than the land value.

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By contrast, an established property typically offers a much higher land to asset ratio. For someone entering the market, this fundamental difference in where your money is parked often leads to significantly better capital growth over the first decade of ownership.

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2. The Ongoing Cost of Delivery

While the extreme volatility of previous years has stabilised, construction costs in Melbourne are still forecast to rise by approximately 4% to 5% throughout 2026.

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This ongoing escalation places pressure on builders, particularly those working on tight margins. When you buy a property that has not been built yet, you are inadvertently taking on the delivery risk of the builder. If the project faces delays due to labour shortages or material costs, your move in date and your financial planning are put on hold. An established home removes this variable entirely, providing a fixed price and a certain timeline.

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3. The Settlement Valuation Gap

Perhaps the most significant financial hurdle for off the plan buyers is the bank valuation. When you sign a contract today for a home that will be finished in two years, you are making a bet on what a bank will think of that property in the future.

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If the market remains flat or construction quality does not meet expectations, the bank may value the finished home for less than your contract price. This creates a valuation gap that you must cover in cash to settle the property. With established homes, the valuation happens upfront on a finished product, providing a level of financial security that a brochure cannot offer.

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4. Scarcity vs Volume

Melbourne’s most resilient markets thrive on scarcity. There is a finite supply of established homes with character and unique features. When you buy into a large new development, you are often buying one of many identical or very similar lots.

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This lack of uniqueness can lead to higher competition when it comes time to rent or sell. An established home offers a level of individuality that generally commands a premium in the secondary market.

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A Strategic Choice

Our perspective is not about being against new developments; it is about being for the most secure financial outcome for our clients. While upfront tax savings like the current stamp duty concessions are enticing, they must be weighed against the potential for growth and the certainty of your move in date. We believe that for most buyers, the security and land value found in established property provide a much stronger foundation for the future.

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