Kicking off 2022, our team conducted research into Off-The-Plan sales opportunities across Asia, Europe, and the USA. With mounting inflation, the inevitable tapering of monetary support from the US Federal Reserve, and the growing likelihood of RBA raising rates, the mood for apartment sales remains conspicuously optimistic. Below is a summary of our findings:
- Asia Pacific
Also read: How To Sell Off-The-Plan Apartments To First Homebuyers?
ASIA – PACIFIC
Off-the-plan apartment sales in Australia are making a comeback with consumer perception about how buying properties today will deliver a healthy capital gain by the project’s completion heightening.
On the Gold Coast, Paul Arthur, chief executive of Queensland Sotheby’s International Realty, said that there has been a “lot of movement and some significant sales” from OTP buyers seeking holiday homes.
In Brisbane, Paul Barratt, CBRE managing director, says off-the-plan projects, such as the nine-storey seaside Mirada development in Suttons Beach, about 39 kilometres north-east of Brisbane, are “really firing”.
Market conditions have improved in Melbourne, with house values rising 2.4 per cent and units around 1.4 per cent during the past three months after falls during the extended lockdown.
Off-plan property sales in Dubai have registered strong growth in 2021, according to Property Finder. In August last year, off-plan properties recorded AED 4.95 billion, or USD 1.3 billion across 2,599 sales deals, a statement from the company said.
This is the highest sales value to be recorded for sales of off-plan property in Dubai since December 2013, representing an eight-year high and the highest monthly off-plan transactions by number since November 2019.
Last August 2021, UOL Group controlled by billionaire Wee Cho Yaw said it had sold more than half of a residential condominium project in northern Singapore that was launched on the last weekend of that month, reflecting robust demand in one of the world’s most expensive housing markets.
Additionally, about 60% of the 448-unit of The Watergardens at Canberra, were sold during its weekend launch last August, the company announced.
With incomes largely protected by public support packages and spending reduced due to Covid-19 restrictions in 2020 and 2021, household savings rates in southern Europe have risen to the highest level in decades, boosting domestic demand for property.
“With nothing but computer-generated images to view, off-plan schemes are more likely to be purchased remotely and 50 per cent of our sales are sight unseen,” James Vizetelly, marketing director of Affinity Spain on the Costa del Sol said.
As property tax decreased from a sliding scale of 8-10 per cent to a flat rate of 7 per cent, and stamp duty on new-builds decreased from 1.5 to 1.2 per cent in Andalucia, sales of off-the-plan apartments in the area have significantly soared.
In Greece, the 24 per cent VAT payable on new-build homes has been suspended until the end of 2022, with only a transfer tax of 3 per cent and an average 8 per cent reduction in annual property tax (ENFIA). This triggered a return of dormant buyers.
Hamptons’ latest analysis from their first Off-Plan Sales Index in 2020 showed that 33% of new home completions in England and Wales last year were sold off-plan, equating to 49,000 new homes.
Historically, London still recorded significant sales in new homes sold off-plan in 2020 than anywhere else in the country. Over half of new homes (52%) which were completed in the capital were sold in advance of completion. Meanwhile, flats have consistently remained more likely to be sold off-plan than houses accounting for between 90% to 95% of total new home sales in London.
Additionally, Northern England gained the highest number of off-the-plan flat sales in England and Wales. In the North East, four in five (80%) of flat completions last year were sold off-plan, whilst in the North West, they recorded a record-high of 68%. Most notably, 91% of flat completions in Newcastle last year were sold in advance, usually with a large buy-in from investors.
In 2020, property sales volumes spiked to 820,000, marking the highest increase seen in recent years, according to Statista.
In fact, the percentage of new houses sold off-plan, before even the start of construction, increased from 27.8% in July 2020 to 33.8% in August 2020. The percentage of new houses sold during the construction stage also increased slightly from 35.3% in July to 37.1% in August. As a result, the percentage of new houses that were sold post-completion dropped from 36.9% to 29.1%.
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