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10 Australian properties giving away freebies to tempt buyers

Melbourne, Australia - November 28, 2015: Visitors reading a row of estate agent signs outside a newly-renovated apartment building at 5 Commercial Rd, South Yarra. Formerly a derelict hotel, the site was the focus of Series 11 of popular Channel Nine TV series The Block. a reality renovation contest.

Australian property developers are getting really desperate.

This year, we saw a rise in the number of developers offering freebies such as free utilities and strata bills, free mortgage repayments, free Vespas or cars, and even throwing all-expenses-paid parties just to incentivise buyers.

And according to Suburbanite principal and property analyst Anna Porter, you’re missing out if you’re not scoring yourself a freebie.

“Anything from reduced rates to free cars and even furniture gift cards are currently being offered,” she said. “There’s a development in Sydney Olympic Park which is even guaranteeing rental income for two years for the first 10 buyers.

“Units and apartments are oversupplied and developers are starting to feel the pinch.”

10 Australian properties offering freebies

According to Porter and realestate.com.au, these are some examples of developers who will throw in free furniture, help you with your deposit or pay for rent for some early-bird buyers:

  1. Engadine, Sydneycompetition to win a Range Rover; the developer will also furnish your apartment with a furniture gift card valued at 3 per cent of purchase price

  2. Moonee Ponds, Melbourne$0 rates or body corporate for two years

  3. Cremorne Melbourne: $20,000 towards deposit

  4. Parramatta & RhodesMeriton is offering cheaper finance

  5. Sydney Olympic ParkMirvac is guaranteeing rental income for two years for the first 10 buyers

  6. Epping$5,000 gift card for referrals

  7. Essendon Village, Melbourne: offering a car for next two purchasers who buy before Christmas

  8. Montage, Mont Albert Melbourne: free additional carpark with any apartment purchased

  9. Moreville, Footscray Melbourne: $30,000 Coco Republic Voucher

  10. Vic Square, Footscray Melbourne: Double the FHB Grant

Buyers have bargaining power

The good news is, desperate developers offering big incentives puts prospective buyers in the driver’s seat – so don’t be afraid to haggle hard. After the incentives run out (such as free rent or mortgage repayments for a period), just be sure you can afford the properties after they run out.

“Ask yourself (or team of property professionals) if there is a vacancy issue in the market and if you will have to reduce the rent to get a tenant, or have large gaps between tenants once the guaranteed period expires. If so, make sure you can afford that.

“Have you also considered your ability to repay the loan after the incentive period?”

Freebies aren’t without risk

However, Porter warned buyers that snapping up a property without doing your due diligence can end badly.

“Don’t be lured in by the car that comes with the unit or the holiday,” she warned. “Focus more on getting the right property for the right price and save yourself money, over getting a holiday.

“The developer will factor the cost of the incentive in the price. You must ask yourself, would you rather save $20,000-$30,000 or get a cheap holiday?”

Developers factor the incentives into their pricing – so one way to negotiate is to ask for a discount on the property price or get them to offer a lump sum cash back on settlement.

Rental guarantees and mortgage repayments can carry longer-term risks, she said.

“If the developer goes bust or simply walks away from the development then how do you get the money from them? It can be very hard to recoup those funds without a costly legal battle,” she said.

“So, getting the cash, discount or item upfront at settlement is a lower risk option.”

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