December 10, 2025
A common belief in the property market is that buyers need full capital available upfront in order to purchase a home or an investment unit. This belief often delays buying decisions and places unnecessary pressure on first time buyers who are trying to enter the market.
In this edition of Myth vs Fact, BBG Chief Executive Officer Paul Berman explains how deposits, staged payment structures, and bank issued guarantees create far more flexibility than most buyers realise. He also shares practical advice for first time buyers who want to strengthen their financial position before taking ownership.
You need full capital upfront to purchase a property.
You only need the initial deposit upfront. The rest of the balance is covered later through structured deposits, staged payments, or a bank issued guarantee that is usually required closer to transfer. Paul explains that if a buyer intends to use bank finance, the bank will typically issue a guarantee on the buyer’s behalf. This gives the seller security while giving the buyer time to prepare financially. The guarantee is often only actioned once the development is near completion. This structure allows a phased entry into the purchase.
Structured deposits
Some developments allow buyers to enter with a lower initial deposit. A portion may be paid upfront and the remainder paid over time. This gives buyers a manageable entry point without large cash commitments at the start.
Bank issued guarantees
The bank provides a guarantee for the balance of the purchase price. This is usually subject to valuation and becomes payable only at transfer. This gives buyers time to prepare their finances.
Off plan flexibility
When purchasing off plan, buyers often have many months before any balance is due. This extended timeline creates additional financial breathing room.
Extended timelines where negotiated
Some sellers allow additional time before guarantees must be provided. This supports buyers who need more time before finalising their finance.
“For first time buyers the goal is to avoid unnecessary pressure. If you can negotiate a lower deposit or stagger the deposit over time it can make the entry far more manageable. It is still important to build toward a meaningful deposit because it reduces the size of your bond and lowers your monthly instalments.” - Paul Berman
Negotiate a lower initial deposit
Some developers may accept a five percent deposit. This reduces the upfront cost and makes it easier to enter the market.
Stagger the deposit
A deposit can sometimes be increased over time until it reaches ten or fifteen percent. This depends on the agreement with the developer and the structure of the bond.
Understand the value of a meaningful deposit
A larger deposit reduces the size of your monthly instalments and improves affordability.
Consider the full cost of ownership
- Rates
- Taxes
- Levies
- Insurance
- Electricity
- Water
- All utilities should be accounted for before committing.
Secure pre approval early
Pre approval confirms your affordability and speeds up the finance process. It also strengthens your position when negotiating.
“You do not need full capital upfront. You need the deposit. If you apply for bank finance the bank issues a guarantee for the balance. This only becomes due closer to transfer which gives you time to prepare.”
You do not need full capital upfront to enter the property market. You need the deposit and a clear understanding of when the remaining balance is due. Structured deposits, staged payment schedules, and bank issued guarantees create a phased financial pathway that makes property ownership far more accessible than most buyers realise.
The key is to ask the right questions and ensure that your deposit and bond structure supports your long term financial stability.
