An off the plan purchase means signing a contract for a property that does not yet exist. You are buying from a plan, a specification and a display suite, with construction and settlement sometimes years away. The price is fixed at signing. The property is not built until later. Everything that can happen to a market in the meantime happens after you have already committed.

That gap, between the price you agreed to pay and what the finished property is actually worth when it settles, is where the risk in an off the plan purchase concentrates. It shows up in two places: the sunset clause that governs how long the developer has to complete, and the valuation your lender obtains before it will release funds. Both deserve more attention than they usually get at the point of signing.

The contract price is not a valuation

A developer’s price schedule reflects the economics of the whole project: construction cost, marketing spend, sales incentives, and a staged release strategy that often prices early lots lower to build momentum and later lots higher once the building is selling well. None of that is a valuer’s assessment of what the completed property will be worth against comparable sales. It is a sale price set by the vendor, and buyers new to off the plan purchases sometimes treat it as though it carries the same evidentiary weight as an independent figure. It does not. The difference between a market valuation and other figures that get called a valuation matters here as much as anywhere.

What changes between signing and settlement

Off the plan contracts routinely run twelve months to three years from signing to completion, longer again for larger apartment projects. A great deal can happen to a property market in that time. Brisbane has moved through distinct cycles inside single project timelines before, and a purchase that looked conservatively priced at signing can look expensive by the time the building is finished, or the reverse. Because the contract price does not move once you sign, all of that market movement lands on you, not the developer, whichever direction it runs.

Sunset clauses

An off the plan contract carries a sunset date: a point by which the development must reach completion, after which either party can generally terminate. The clause exists for a sensible reason, to stop a buyer being bound indefinitely to a project that never gets built. But it can cut against a buyer too. In a market that has risen since the contract was signed, a developer facing delays has an obvious commercial interest in the project running past its sunset date, terminating the existing contracts and reselling the completed lots at current prices rather than the prices locked in years earlier.

Off the plan contracts for proposed lots in Queensland are subject to specific disclosure and sunset date requirements, and the standard conditions used across the industry generally limit how freely either side can walk away once a sunset date is reached. The detail depends on the contract you have signed and the reason for the delay, so a buyer approaching a sunset date is better served having the clause read by a solicitor than assuming it protects them one way or the other. What no version of the clause removes is the underlying exposure: a delayed settlement lands you in a different market to the one your finance and your budget were set against when you signed.

Why the lender’s valuation can land short at completion

Before releasing settlement funds, your lender will instruct its own valuation of the completed property, carried out close to settlement rather than at the date you signed. That valuation is built the same way any residential valuation is built, from verified comparable sales of similar completed properties around that time, not from the contract price you agreed to years earlier.

This is where a shortfall can surface. If the market has softened since you signed, or if the original contract price included a premium for off the plan risk, staged pricing, or a developer’s margin that comparable completed stock does not carry, the lender’s valuation can come in below the contract price you are obliged to settle at. The practical effect is a reduced loan relative to the purchase price. You are then left finding the difference in cash, renegotiating with the lender, or in the worst case unable to settle and at risk of losing your deposit under the contract. This is one of the more common ways off the plan finance goes wrong, and it tends to arrive as a surprise days before settlement rather than something buyers have planned for years in advance.

An independent valuation before you sign

Because the property does not exist yet, a pre-signing valuation cannot inspect a finished dwelling. What it can do is assess the specification against genuinely comparable completed developments nearby: similar building quality, similar unit mix, similar position and outlook, similar body corporate structure. That gives you an independent benchmark for what a comparable finished property is actually worth, set against the price the developer is asking, rather than relying on the sales brochure’s own comparisons or a display suite pitched to sell.

  • Comparable completed stock. Recently settled sales in similar buildings nearby, not other lots in the same off the plan release.
  • Finish level. What the specification promises against what comparable completed buildings actually delivered, since inclusions on paper and inclusions on handover are not always the same thing.
  • Scheme structure. Body corporate fees, car parking allocation and common property, all of which affect what a buyer will actually pay once the building is real.

Run alongside a check on which type of valuation actually fits your purpose, this gives you a considered view of whether the price reflects genuine market value or whether you are paying a premium for the promise of future growth. That premium is not necessarily a bad thing to pay, but it should be a decision you make knowingly rather than one that surfaces as a shortfall at settlement.

An independent valuation before settlement

As completion approaches, an independent valuation ahead of, or alongside, your lender’s own assessment gives you time to plan for a gap rather than discover one in the final days before settlement. If your figure and the bank’s land close together, that is useful confirmation. If they diverge, you have an independent, reasoned basis for querying the bank’s figure, and time to arrange the difference, negotiate with the lender, or raise the point with the developer, instead of scrambling against a settlement date that will not move for you.

This applies with particular force to units and townhouses, where the way a scheme is valued depends on factors a generic off the plan comparison will not pick up. Whether you are still deciding on a purchase or watching a completion date approach, the same principle from getting independent advice before you buy or sell holds for off the plan property. A pre-purchase valuation priced on genuine comparable evidence, arranged well before your sunset date arrives, is worth far more than a figure you first see the week your lender’s valuer reports back.