What to Ask Before Buying an Affordable Housing Property

The discount is the first thing to interrogate

A discounted price is only as good as the conditions attached to it. Before you fall for a number, establish how it was arrived at and what happens to it later.

• Is the price permanently reduced? Or is another party retaining an interest, a share of future value, or a right to buy back?
• Who set the discount, and on what basis? A planning obligation, a funding condition and a developer's own program all behave differently.
• Is there an independent valuation? Ask for one, and ask whether the lender will accept the scheme at all.
• What does the contract say about resale? Look for restrictions on who you can sell to, when, and at what price.

How to judge whether a discounted home is good value goes further into the comparison.

The property and the building

1. What is the building's condition, and when was it last inspected?
2. For an apartment, what are the body corporate levies, and what is in the sinking fund?
3. Are there known defects, cladding issues, or remediation works planned or underway?
4. What are the short-term letting rules in the building or scheme?
5. What is insurance likely to cost, particularly for coastal or flood-affected areas?
6. What are the rates, water and other outgoings?

None of these are the seller's problem to solve for you, but all of them change the true cost of ownership.

The finance questions that decide whether it works

• Will a lender accept this scheme, and this property, for the loan I need? Ask before you pay for anything.
• Does my deposit meet the lender's requirement for this property type? Off-the-plan and construction purchases are excluded from several occupation-based waivers.
• Which government benefits can be combined with this purchase? Some guarantees and shared-equity arrangements cannot be stacked.
• What happens if settlement is delayed? Construction timelines slip, and a pre-approval can expire while you wait.

The legal questions

Ask your conveyancer or solicitor, not the seller:

1. What conditions run with the title, and for how long?
2. Are there occupancy requirements, and what happens if my circumstances change?
3. What are my obligations if I need to sell within a set period?
4. Who pays which costs at settlement?
5. Is there anything in the contract that differs from what I was told verbally?

The questions nobody enjoys asking

• What if I lose my job, or my hours are cut? Model the repayments at a higher rate than you are being offered.
• What if I need to move for work? A home that only works for one posting is a risk if your role can change.
• Am I buying this because it is discounted, or because it suits my life? A saving on the wrong home is not a saving.

A short red-flag list

Be cautious if a discount is described but never documented, if you are asked to pay a fee before seeing a contract, if a scheme's eligibility criteria are vague, or if you are told not to involve your own solicitor. None of those are how genuine allocations work.

Where to start

Get the numbers first, then the property. Building a realistic deposit and finance plan and what happens after your eligibility check both come before a contract.