What are the benefits of buying a plot and plan home in a new development?

Whether a freehold home or sectional title unit in a secure estate or a complex, buying a home off-plan in a new development from a reputable developer offers numerous benefits for the purchaser, says Pam Golding Properties.

Firstly, there are financial benefits to buying off-plan, says Katya Varga, Pam Golding Properties assistant area and projects manager in Stellenbosch and Somerset West. “Buyers save on transfer duty as development sales are inclusive of VAT and therefore regarded by banks as the purchase price, which means that the buyer doesn’t need to fund transfer duty with cash. In addition, more advantageous financing options are usually available and plot and plan purchasers can receive 100% home loans.

“Furthermore, a cash deposit of just 10% generally secures the purchase, with the balance payable from approximately one to a few years later when construction of the unit is complete. As a result, your acquisition is likely to appreciate in value – in other words, you enjoy capital growth before it is fully paid for, depending on timelines, payment structures, and market conditions.”

Justin Kreusch, joint area principal for Pam Golding Properties in Gqeberha concurs: “Plot and plan purchases can be extremely viable for buyers who identify good developments being launched in good areas and get in early. Depending on the size, a project which is going to take a couple of years to complete can reap solid capital gains for purchasers in a relatively short space of time, as long as the development sells well and goes ahead according to plan. This is why it is imperative to ensure you are dealing with a reputable developer and professional, experienced real estate agency.”

Varga says that another key advantage of buying into a sound plot and plan development is that the end cost is established at the onset with the buyer signing a building agreement at a fixed price. This eliminates the hassle and costs involved in designing and building themselves, especially as budgets can escalate.

Nelson Ferreira, Pam Golding Properties Gauteng regional head points out that land and building packages are often in secure estates and therefore the main advantage is that you are investing in the security and the lifestyle, as well as a home customised to suit your own individual preferences. “This type of investment is naturally more expensive than buying resale properties, but most of these purchases are for primary use and not pure investment, so discerning buyers prefer a contemporary, customised home, with brand new fixtures and fittings.”

Adds Varga: “Plot and plan residential developments typically managed by seasoned developers and builders are well thought out and cohesive in design throughout, while offering buyers a choice of a few plans at different price points, including the interior specifications or ‘look’ such as dark or light options.”

In East London in the Eastern Cape, where Pam Golding Properties are specialists in gated estates, area principal Sean Coetzee says that plot and plan options create a balance between bespoke design and off-plan options for buyers with a hard budget. “New houses in these developments come with developer and NHBRC (National Home Builders Registration Council) guarantees, while architectural guidelines create and maintain a standard of construction and design, protecting your investment and preventing a ‘popcorn’ village. A consistent, high standard of design and build quality creates a higher degree of desirability, ensuring house prices are maintained and increase in value.

“Notably, most out-of-town developments have become autonomous from municipal services, thereby ensuring a consistent supply of basic essential services, such as onsite boreholes, reverse osmosis plant (to purify or desalinate water), and waterborne sewerage systems with anaerobic sewerage treatment plants.

“Increasingly,” says Coetzee, “buyers are finding that plot and plan acquisitions allow them to express their accommodation requirements more freely than buying an existing home, offering them a viable departure from which to design or envision their own home, while enabling them to adjust their schedule of finishes to meet their budgets.

“Gated communities also offer buyers a higher degree of service in terms of the maintenance of common properties, while architectural guidelines are contemporary, incorporating the latest design trends and technology, and most importantly, allowing for the inclusion of new energy generation technology, which is expensive to retrofit in existing houses.”

Says Sandra Gordon, Pam Golding Properties senior research analyst: “Given the major structural shifts we are seeing in terms of the way we are living and working, and the desire to go ‘green’ or at least reduce our dependence on increasingly expensive government-supplied utilities, such as electricity – particularly amid ongoing load-shedding - there is much to be said for designing your home to reflect these new imperatives rather than trying to restructure an existing house.”

Apart from the appeal of modern design, new buildings offer the latest in digital security and fast bandwidth for residents, while many include DSTV, air conditioning, and home automation. Green features are usually standard and include the economical use of greywater and hot water generation.

Varga says as you are buying into a new build, warrantees will be in place, and once complete you have a period of time to make a snag list where any defects will be rectified at no cost. Another advantage is that major maintenance is rarely required for some time after completion.

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