What we won’t buy
Why off-the-plan units rarely make our shortlist
Land-to-asset ratio, depreciation, valuation gaps and supply concentration — explained without the slogans.
Off-the-plan units occasionally make sense — for the right buyer, at the right price, in the right structure. The problem is that the marketing economics of new apartment stock require them to be sold into the wrong buyer, at the wrong price, in the wrong structure.
The four hard numbers
| Off-the-plan unit | Established house | |
|---|---|---|
| Typical land-to-asset ratio | 10–20% | 55–75% |
| Embedded marketing & GST cost | ~15–25% of price | ~3% (agent + duty) |
| Bank valuation risk at settlement | Common 5–15% short | Rare |
| Supply concentration (1km radius) | Often 500+ similar units | Usually <20 substitutes |
You are not buying a property. You are buying a marketing campaign, two sets of GST and a depreciation schedule.
Why land-to-asset ratio matters more than people admit
Land appreciates. Buildings depreciate. A property with 70% of its value in land grows roughly 3× faster, over a decade, than one with 15% — even in the same suburb. Off-the-plan units are structurally on the wrong side of this equation from day one.
Where your purchase price actually goes — typical OTP unit
- Building cost55%
- Developer margin & marketing22%
- GST9%
- Land14%
The narrow case where they do work
- Genuinely scarce locations (waterfront, heritage precincts) where land is locked.
- SMSF buyers prioritising depreciation, low maintenance and single-tenant suitability over growth.
- Owner-occupier buyers paying for lifestyle — and not pretending it is an investment.
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