26 Aug 2019

Beware of buyer incentives

“Buy today, with nothing more to pay!”

We all know there will be more to pay.

“Buy one, get one free!”

Is it really free?

Most of us are savvy consumers when it comes to our day-to-day purchases, dubious of catch cries that seem too good to be true. But when it comes to buying property, we may not always see through the incentives offered up by developers enticing you to take a slice of land or commit to an off-the-plan apartment.

What are buyer incentives?

In a bid to entice buyers, developers will often ‘sweeten’ the property purchase with special offers. These are known as buyer incentives. These incentives are varied, and special deals range in value depending on market conditions and the stage of development.

Examples of buyer incentives include reduced stamp duty offers, smaller deposits, furniture packages, upgrades on finishes, payment of bills for up to 24 months – even cars and holidays.

Why do developers offer buyer incentives?

Buyer incentives are introduced for a variety of reasons, including meeting pre-sale targets in order to start construction, generating publicity and as an exercise to boost sales generally.

Buyer incentives don’t necessarily mean a development is performing poorly, although that is one reason developers offer up incentives. In the current slow property market with tighter lending standards, we’re seeing a rise in buyer incentives.

Sales are critical to any development. Buyer incentives allow developers to tempt buyers without reducing the sale price, which could affect the value of the development and draw into question the development’s integrity.

Should buyers beware of incentives?

Buyer incentives may sound like a win for buyers, but just like those hard sell slogans, they may not be as good as they seem. Here’s what buyers should be aware of:

    • Don’t let exciting incentives fool you
      Buyer incentives are designed to be enticing, so it’s only natural that buyers get caught in the excitement of a holiday or a brand-new luxury car. Buyers should instead focus on the biggest purchase they are making: the property.


    • Ensure the property is good value
      The property needs to represent good value in the first place. If the property and purchase price does not represent good value then this could cost the buyer far more down the track, even despite generous buyer incentives. In other words, it still needs to be a ‘good buy’. This means looking at the location, projected growth, rental yields, and consulting with real estate agents.


    • Buy a property that meets your needs
      Don’t fall into the trap of buying a property just because it seems like a good deal with buyer incentives on top. The principles of buying property still stand; if the property does not meet your needs and financial goals then you shouldn’t buy it.


  • Look for incentives that represent the best value and suit your needs
    Not all buyer incentives are a ploy. Provided the property represents good value and meets your needs, some buyer incentives can be very valuable for buyers. For example, stamp duty incentives could save buyers thousands, while 5% deposit incentives can be great for first-home buyers looking to get into the market sooner.

Mortgage House

At Mortgage House, we’re no strangers to the home buyer’s journey. It’s a long (but rewarding) one. If you’re thinking of applying for a home loan, you can Apply Online today to get started!

Fast track your home loan
Apply Online Book a Call Back
133 144

Why Choose Mortgage House?

Award Winning