Residential Views -
With the market shifting towards higher density new builds, more purchasers are navigating the challenges of buying off the plans.
The visible evidence of this shift is seen in the city skylines, where migration influx and population growth is fuelling a robust demand for townhouse-style homes.
Trent Quinton, a prominent off-plan salesperson at Bayleys, reflects on this transformation, saying, "Since 2014, we have witnessed a remarkable surge in residential developments emerging throughout New Zealand. Kiwis, across all demographics, are increasingly drawn to the apartment lifestyle. Whether it's the affordability or the convenience of living, we've noticed that more and more New Zealanders are now comfortable investing in an 'idea' rather than an existing home."
Despite this surge, Quinton emphasizes that New Zealand still faces a critical shortage of residential housing. New projects are offering options for those who cannot afford a standalone home in their desired neighbourhoods, allowing them to enter the property market through new apartments.
Spurred by favourable tax treatment and higher-performing rental yields, investors are also increasingly encouraged to purchase new build apartments and townhouses over existing standalone houses.
Quinton further notes, "Baby boomers are active buyers, and when downsizing, they seek style and convenience without compromising on having a proper home, not a cramped space."
Developers have had to adapt to these changing preferences, constructing larger floorplans within boutique complexes featuring high-end amenities. Quinton highlights that buyers are attracted to new developments because they offer the latest building standards, modern appliances, and green initiatives. For the cost of upgrading an existing home, buyers can purchase a new one with all their desired features already included.
However, despite the advantages of multi-dwelling projects, some New Zealanders remain apprehensive about purchasing sight-unseen, particularly due to concerns about potential development delays. Quinton acknowledges these concerns, saying, "In residential developments, there are numerous moving parts. The construction boom in the country has strained both available labour and access to credit for these projects."
To address these concerns, Quinton emphasizes the importance of thorough research when selecting a developer, paying close attention to their previous projects and industry reputation. He adds, "Adequate research is crucial for buying with confidence, and legal professionals need to review contracts. Development contracts contain elements that you won't find in a standard sale-and-purchase agreement, such as clauses related to additional costs, liabilities, and provisions. Legal representatives may also include penalty clauses to provide security in case of delays."
Quinton further advises buyers to focus on specifications and floorplans, as buying into a concept allows for flexibility in certain aspects. He encourages open communication with developers regarding adjustments like relocating power outlets or modifying light fixtures.
As an investor himself, Quinton highlights that the quality of a project can be gauged by the calibre of its buyers. He advises potential buyers to start by researching the neighbourhood, taking into consideration factors like school zones, transportation links, and local infrastructure.
While Quinton's top rule for off-plan property buyers remains thorough research, he stresses the importance of selecting a project that aligns with one's lifestyle. He notes that the development process can span several years, emphasizing the need for it to fit the buyer's timeline and preferences, especially concerning the deposit and payment schedule.