Why do some people say never buy off the plan?

Because the risks fall on the buyer for a long time: delays, a changed product and a valuation that may come in under the price. Official pages from Victoria, NSW and Queensland list those same risks. The same pages also list benefits such as a locked-in price and design input, so the answer depends on the contract and the project.

Can a developer cancel after I have signed?

Only if the contract allows it, and in several states only on conditions. In NSW a developer using a sunset clause needs the buyer's agreement or a Supreme Court order. Queensland has similar rules for many contracts, with the community titles exception noted above. Victoria's rules are in the Sale of Land Act 1962. A buyer who defaults can also lose the deposit, according to WA Consumer Protection.

What happens to my deposit if the developer goes under?

It depends on how the deposit was held. NSW and Queensland say deposits are held in trust and not released to the seller before settlement, and the NSW Government says this protects the money if the developer becomes insolvent. WA Consumer Protection warns that unprotected deposits can be tied up. A conveyancer can confirm how your contract treats it.

Is there protection if the finished townhouse has defects?

Some. In NSW, the Home Building Compensation scheme applies to residential work over $20,000 in buildings up to three storeys. Victoria's consumer page notes limited recourse against the builder. Check which warranty or insurance applies in your state before you sign.

Can I walk away if values fall before settlement?

Not on that ground alone. The NSW Government and Consumer Affairs Victoria both say the price is locked in when you sign. The only no-reason exit is a cooling-off period, which is 10 business days in NSW for off-the-plan buyers and 3 clear business days for private sales in Victoria (that page does not mention off-the-plan contracts), and WA has none.

What are the risks of buying off the plan?

The main risks of buying off the plan are that you cannot inspect the finished home, the completion date can move, the value at settlement can be lower than the price you agreed, the plans can change, and the contract may allow the developer to cancel. Consumer Affairs Victoria, the NSW Government and the Queensland Government each list versions of these. As at October 2026, the states covered here also have some protections, but they differ in strength and in which type of title they cover.

Checked October 2026. Rules, rates and prices change, so confirm anything that matters with the source linked below.

The risks, and what the rules do about them

Risk	What the official pages say	Protection to look for
Finished home differs from the sales material	You rely on an artist's impression, floor plan and advertising, and finishes may differ in quality (Consumer Affairs Victoria)	The finishes schedule in the contract; Australian Consumer Law, under which WA Consumer Protection says the right to claim damages cannot be excluded by a contract term
Delays	Completion dates are uncertain (Victoria); the project and settlement may be completed much later than expected (NSW); unexpected delays in the building process (Queensland)	Statutory 18-month markers in Victoria (by default) and Queensland; sunset clause rules
Value falls	The value at settlement may be less than the contract price (Victoria, NSW); market prices can change between contract and settlement (Queensland)	None on price: the price is fixed at signing. Finance planning is the main tool
Plans change	Unexpected changes to plans or specifications (Victoria)	Notice and exit rights, which vary by state (below)
Developer cancels	Contract clauses can allow cancellation (Queensland)	Consent or court order requirements for sunset clauses in NSW and, for some contracts, Queensland; in Victoria, ask a conveyancer how the Sale of Land Act 1962 applies
Defects	Limited recourse against the builder, because you buy from the developer, who hires the builder (Victoria)	Statutory warranty or insurance schemes, which differ by state
Developer fails	Deposits may be tied up if not protected (WA Consumer Protection)	Deposits held in trust

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Delays and the sunset clause

A sunset clause sets a date by which the plan must be registered or, in NSW, an occupation certificate issued. If the date passes, either side may be able to end the contract. The NSW Government says off-the-plan contracts commonly include one.

Reforms passed in NSW (2018) and Queensland (2023) mean developers there cannot simply cancel and resell. In NSW a developer needs the buyer's consent or a Supreme Court order. In Queensland the same applies, but the Queensland Government says the 2023 reforms do not cover lots in community titles schemes, and the Department of Justice adds that linked or single house-and-land contracts are also outside them. Many townhouse projects are one or the other. Victoria has its own rules in the Sale of Land Act 1962, which a Victorian conveyancer can explain. What is a sunset clause covers each state in more detail.

Changes to the plans

Victoria. Consumer Affairs Victoria lists unexpected changes to plans and specifications among the risks. Whether you can cancel when a plan of subdivision is amended depends on the Sale of Land Act 1962 and the size of the change, so ask a conveyancer before relying on a right to exit.
NSW. Vendors must notify buyers of material changes. A buyer who is materially prejudiced can withdraw and recover the deposit, or settle and claim compensation capped at 2 per cent of the price. The NSW Government says there are only 14 days from notification to act.
Queensland. A buyer can back out if the disclosed state of the land changes in a way that causes significant disadvantage, within 30 days of the developer's notice or before title transfers, whichever is sooner.
Western Australia. WA Consumer Protection warns that agreeing to a variation clause may prevent compensation claims if changes do not suit you, and gives a five per cent change in balcony area as an example of a tolerance a developer may build in.

Defects and the builder

Consumer Affairs Victoria points out that in a typical off-the-plan sale the developer signs the building contract and you buy from the developer, so your recourse against the builder can be limited. In NSW, the Home Building Compensation scheme covers residential building work over $20,000 including GST in buildings of up to three storeys, and proof of cover is required before work starts. Rules for other states differ, and they are a question for your conveyancer or the state building regulator.

If the developer fails

Deposit rules are the main protection. NSW requires the deposit to be held in a trust or controlled money account for the contract period and says the developer cannot take it before settlement. Queensland says the seller cannot access deposits before settlement or before the contract ends and the seller is entitled to them. WA Consumer Protection warns that without such protection a buyer can end up an unsecured creditor. See off the plan deposits and deposit bonds.

The other side of the ledger

Consumer Affairs Victoria also lists reasons people choose off the plan: the price is locked in at signing, buyers get more say in the design, and transfer duty may be lower than on an established property. The two lists exist together, which is why neither "always" nor "never" is a rule. For the clause-by-clause view, see what to check in an off the plan contract.

A binding contract carries the risk. Outside the cooling-off period, none of the official pages describe a right to withdraw simply because the market has moved.

Common questions

Why do some people say never buy off the plan?: Because the risks fall on the buyer for a long time: delays, a changed product and a valuation that may come in under the price. Official pages from Victoria, NSW and Queensland list those same risks. The same pages also list benefits such as a locked-in price and design input, so the answer depends on the contract and the project.
Can a developer cancel after I have signed?: Only if the contract allows it, and in several states only on conditions. In NSW a developer using a sunset clause needs the buyer's agreement or a Supreme Court order. Queensland has similar rules for many contracts, with the community titles exception noted above. Victoria's rules are in the Sale of Land Act 1962. A buyer who defaults can also lose the deposit, according to WA Consumer Protection.
What happens to my deposit if the developer goes under?: It depends on how the deposit was held. NSW and Queensland say deposits are held in trust and not released to the seller before settlement, and the NSW Government says this protects the money if the developer becomes insolvent. WA Consumer Protection warns that unprotected deposits can be tied up. A conveyancer can confirm how your contract treats it.
Is there protection if the finished townhouse has defects?: Some. In NSW, the Home Building Compensation scheme applies to residential work over $20,000 in buildings up to three storeys. Victoria's consumer page notes limited recourse against the builder. Check which warranty or insurance applies in your state before you sign.
Can I walk away if values fall before settlement?: Not on that ground alone. The NSW Government and Consumer Affairs Victoria both say the price is locked in when you sign. The only no-reason exit is a cooling-off period, which is 10 business days in NSW for off-the-plan buyers and 3 clear business days for private sales in Victoria (that page does not mention off-the-plan contracts), and WA has none.

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Sources

This is general information, not financial, tax or legal advice. Get advice that suits your situation before you buy.