The Bigger the Project the Less Likely It Will Get Built, He Said

"There are thousands of buyers who have paid deposits in developments in Melbourne where the project has not even started," said Melbourne Real Estate managing director Peter Hooymans, who holds that off-the-plan purchases work as long as buyers do their homework.

You also have to be comfortable with the fact that what you sign up for may not be what you get. Standard off-the-plan contracts allow for changes to individual units or to the mix of units.CatherineCashmore, from JPP Buyer Advocates, said: "It could be the window you wanted overlooking the kitchen sink isn't there."

Mr Hooymans advises buyers only consider developments that have planning permission."Otherwise you are signing a contract that is very open," he said."What is the final product mix? If it's going to be 200 apartments in Southbank all rented out to students then I want to know that."Given tougher lending conditions imposed by banks, Mr Hooymans further cautions against buying into anything with more than 200 units.

"The bigger the project the less likely it will get built," he said.

Problems can also emerge when the bank comes to evaluate a finished unit. If the bank's evaluation is less than what you agreed to buy it for, the loan can be denied or you have to pay more.

KNOW THE DEAL

Ali Hurbert-Burns recently signed the dotted line on her second off-the-plan property, a two-bedroom apartment in the Jacques Richmond development.

Ms Hurbert-Burns said buyers needed to be highly proactive in assessing a development.

"You don't have as much control as you have in a normal buying process and you have to be comfortable with that," she said.

CHECKING THE PLAN

* Know your developer. Go and inspect past projects - are they still holding up?

* Get a feel for the development. Is it aimed at investors or owner-occupiers? Be wary of developments with future stages still pending.

* Treat all promises of capital growth with a large grain of salt. Compare your unit with similar developments.

* Time your buying. Good discounts can be had at the launch of a project or when a developer is trying to wrap up the last few sales.

* Hire a solicitor to read over contracts and conduct planning and permit checks.