Off-plan real estate glossary

Off-plan

Buying a property from the developer before it is built. The buyer purchases from plans, renderings and a contract, and receives the home at completion.

Presale

The period when a developer sells units before or during early construction, usually at the lowest prices the project will ever have. Presales also prove demand to the lenders who finance construction.

Assignment

Transferring an off-plan purchase contract to a new buyer before completion. The original buyer earns the difference between the price they signed and the price the new buyer pays, without ever owning the property.

Deposit structure

The schedule of payments an off-plan buyer makes before completion, for example 5% at signing and further payments at construction milestones. The balance is paid, often with a mortgage, at completion.

Pre-absorption

The share of units a developer needs to sell before construction can start or a construction loan can be drawn. A project at 18% sold when it needs 50% is stuck.

Absorption rate

How fast units in a project or a market sell, usually measured in units per month. A slow absorption rate is the first sign that buyers are hesitating.

Risk curve

The way off-plan risk falls over a project’s life: highest at presale, lower during construction, lowest at completion. Prices rise as risk falls, which is where early buyers make their profit.

Completion

The moment the building is finished and handed over to buyers. At completion the remaining balance is due and the buyer becomes the owner.

Sales gallery

A physical showroom where a developer presents an off-plan project with models, finishes and renderings. Galleries sell the dream of the project but rarely show a buyer their own unit.

Hero unit

The best unit in a project, usually the penthouse, used in most renderings and marketing. Buyers of smaller units often never see an image of the home they are actually buying.

Unit-level virtual tour

A digital walkthrough of one specific unit, with its real layout and the real view from each window. It lets a buyer see exactly what they are buying before the building exists.

Digital twin

An accurate 3D copy of a building built from its construction drawings. In off-plan sales it lets every unit be shown, measured and walked through before construction.

Gross development value (GDV)

The total amount a developer expects to receive when every unit in a project is sold. It is the headline figure lenders and investors use to size a project.

Construction loan

The bank financing a developer uses to build. Lenders usually release it only after a minimum share of units has been presold.

Overextended market

A market where presale prices already match or exceed the prices of comparable finished homes. The profit gap for early buyers is gone and a correction is likely.

Underextended market

A market where presale prices are still below comparable finished homes. Early buyers can still capture the gap between presale and completion prices.

Developer track record

The history of projects a developer has finished, delivered on time and built as promised. It is the best predictor of whether a new off-plan project will be completed.

Floorplan

A top-down drawing of a unit’s layout. Most buyers find floorplans hard to read, which is why unit-level visualization sells faster than drawings alone.

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