You’ve seen the perfect home. It’s created by your favourite builder, a design and layout that you love, with all the best fixtures and fittings. It’s also a display home. 

Don’t let that put you off. There are actually a huge number of advantages to buying a display home.

Navigating the Australian property market

Navigating the Australian property market can feel overwhelming, because it’s changing all the time. One thing that seems to remain constant: prices are rising and a housing shortage remains. Which means a display home could be a fantastic way to get the home you want. 

What Are Ex-Display Homes?

Ex-display homes are also known as show homes or model homes. It means a property built specifically for the purpose of showcasing their craftsmanship, design capabilities and high-end finishes. 

Display homes are built to encourage potential buyers to invest with the builder. After they serve this purpose, the builder will sell them.

Can you buy a display home in Perth?

Yes, you can buy a display home. You can buy display homes outright, but often builders sell their display homes and then lease them back from the buyer for a set period, so they can continue to use them as a marketing tool. 

Key advantages of buying an ex-display home

Buying an ex-display home can be a very smart move. You’re getting value for money, superior quality and an opportunity to make some rental income on your brand new home before you move in. Your home may also experience capital growth in the time between when you bought it and when you move in. 

Superior quality & craftsmanship

A display home is a primary marketing tool for a builder, so they are often of a superior quality, with impeccable craftsmanship. While all of a builder’s homes should exhibit those same levels of care and quality, display homes often have higher quality appliances or fixtures and fittings to draw a buyer in. 

In a development, display homes often have the best location in the display village, and they will be finished to the highest quality. 

Impeccably maintained properties

While a display home might experience a lot of footfall as potential buyers look around, the properties themselves are impeccably maintained. 

Builders are stringent about making sure that the properties are kept in pristine condition. This attention to detail means that someone buying an ex-display home can be assured their property will be in perfect working order and look brand new. 

Excellent value for money

Ex-display homes will be landscaped and the inclusion of high quality features means an ex-display home can offer real value for money. 

There will also be lower maintenance costs, as the builder will have already been running it as a home during the display period. This means fewer teething problems, which could save on maintenance and cleaning costs. 

Leaseback opportunity

Many ex-display homes are sold with a leaseback agreement. This is where the new owner immediately leases the home back to the builder for a set period, through a separate contract. The builder uses the property to continue showcasing their work and you receive guaranteed rental returns. This is a great option for investors, though it forbids you from occupying the home until the lease expires. 

If you’re purchasing a display home, it's vital to read the leaseback agreement carefully to understand the duration, rental terms and the builder's responsibilities for maintenance.

Move-in ready convenience

It could also offer a potential buyer move-in ready convenience. Rather than having to wait for your home to be built, it’s ready for you as soon as you buy it. 

You may also be able to buy the furnishings as part of the home sale, even saving you the trouble of a lot of unpacking! 

Considerations When Purchasing an Ex-Display Home

It’s clear to see how many advantages there are in buying display homes. There are some things to consider before you make such an investment. 

Location

You need to be sure that you’re happy with the location. Ex-display homes are located where the developer has chosen to build them. This might not be close to local schools, parks, shops or other amenities. You need to ensure that the location suits your personal needs, not just the house. 

Wear and tear assessment

It’s worth doing a thorough wear and tear assessment before you buy a display home. The builder will make sure it’s maintained to the highest standard, but the significant footfall of potential buyers does present a small risk of wear and tear on walls or floors. 

Make sure that you’re aware of this and that it’s factored into the price of your home. 

Contract & warranty considerations

Buying a display home means that the contract you sign with the builder will be different to what you would sign if you were buying a standard new build. 

Typically, your ex-display home will be ‘sold as seen’, which covers the likely wear and tear. It will also list exactly which fixtures and fittings are included, so be sure to check this section. You should also check whether the warranties for any appliances included can be transferred to you. 

It’s important to know that, regardless of whether your home has been used as a show home, your home should come with a builder’s statutory warranty, which will protect you against major structural defects for a specified period of time.

Financial implications 

There could also be some financial implications for buying a former show home. While the leaseback potential may give you the opportunity to make some additional income, it has some potential financial implications. 

Instead of securing a standard residential mortgage, you may have to take out a commercial loan to buy a display home. This means that you will need a 20% minimum loan. Lending criteria is also stricter than for a residential mortgage. 

Buying a display home to live in also has an effect on your stamp duty. If you buy a new build, you only have to pay stamp duty on the value of the land. With a display home, you may have to pay stamp duty on the total value of both the house and land, which will be considerably more.  

Ex-display home buying tips

If you do decide to buy an ex-display home, make sure that you know exactly what’s included in your purchase. You should also inspect the house carefully for any wear and tear, so that you can factor this into the price you pay. 

It might also be worth consulting an independent building inspector to get their thoughts on your investment and how the house has been maintained. 

Final assessment: are ex-display homes worth It?

We’ve taken you through the pros and cons of buying a display home. On balance, ex-display homes are definitely worth it, provided you do your research. If you know exactly what you are getting and negotiate a good price, you can take advantage of getting a superior home, with a larger floor plan and better fixtures and fittings. 

You also have the option to make your home work for you, earning a rental yield through a leaseback option with the builder. This makes buying a display home a good investment. 

It’s up to you to decide how much choice and control over your home you want. With a former display home,  you will have limited chances for customisation. It’s all been chosen. If you are happy with a tasteful, well-appointed home where the best of everything has already been selected for you, and the home is move-in ready, then an ex-display home could be just what you need.