What are the advantages of buying 'off the plans'?
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Although you need vision to visualise the finished product and everything that goes inside when buying off the plans (as there’s no physical property to view before construction takes place), it can pay off. Here’s why:

You will only require 10% deposit for new builds as opposed to 20% deposit for all other properties in accordance to the banks loan to value ratio

Typically, buying off the plans is cheaper than those that have already been built

By the time the home has been built, the area may have risen in value

By selecting an apartment, terrace or townhouse early in the process, you can often choose the best one, well-located in the complex with the best views for better value because prices tend to start climbing as construction nears completion. You also often get to have a say on design and the final finishes.

When the apartment is complete, you get to live in a brand new home complete with landscaping and final finishes.

Tips

Before signing, have your lawyer look over and approve the sale and purchase agreement (as these are not usually standard contracts) and research the developer’s and builder’s track record and credentials.

Shannon CorbettComment
What sellers and purchasers need to consider when completing a pre-settlement inspection
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Under a sales and purchase agreement, the Purchaser has an opportunity to check that the property and chattels are in the same condition as when they signed the sales and purchase agreement.

What to look out for when inspecting the home?

  • All the same chattels listed on the Agreement are still in the property and are in reasonable working order (such as a heat pump; dishwasher)

  • All keys to the property including electronic door openers are available and are in working order

  • That any repairs or maintenance that the vendor has agreed to carry out prior to settlement, has been completed.

  • That there is no rubbish left on site

When should a pre-inspection be carried out?

We recommend carrying out a pre-settlement inspection at least two working days prior to settlement to allow for any such issues

What if there are issues with the property and/or chattels?

This doesn't enable a purchaser to cancel a contract but it does allow a right to compensation.

If there are issues/damage with the property and/or chattels upon the inspection, then the purchaser needs to advise their lawyer. The Purchasers lawyer will then serve notice on the Vendor before 5pm on last working day prior to settlement.

A few remedies may be considered between both parties such as:

  • The Vendor agrees (at their cost) to remedy the issues on or before settlement; or

  • The Vendor agrees to reduce the purchase price to enable you to remedy the issues post-settlement; or

  • An agreed amount is retained by the Purchaser’s lawyer on settlement until the issues have been remedied post-settlement.

Source

General Market performance update
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The median sale price in Auckland overall has flattened yet remains stable. However, Auckland City, Manukau City and Waitakere City all saw annual increases of between 1.5% and 9.5% The median time for a house to sell in Auckland has increased (including most suburbs in Manukau) however the holiday season could be an attributing factor to this.

Auckland’s new listings and inventory levels were both up compared to January last year, suggesting buyers have a reasonable choice of homes to buy at present.
 
Rise in lending activity
The Reserve Bank of New Zealand (RBNZ) has reported that mortgage lending activity rose again in recently. Mortgage lending flows are likely to remain solid in 2019, but any further increase in activity is likely to be slow and steady rather than dramatic.

The Australian property market versus New Zealand’s?
For those concerned whether the Australian property market slump could be reflected here in New Zealand, you’ll be pleased to know that New Zealand’s lending environment is on a solid footing. Why? 80% of New Zealand’s mortgage debt is fixed, with 33% fixed for at least one year. This gives Kiwi households time to adjust before any interest rate increase hits; whereas most lending in Australia is on floating rates, making it much more exposed to any changes.

General market performance
The market remains stable and this recent correction may well have prevented something more drastic happening to the property market. Contributing factors to the correction in the market place include the introduction of the new Overseas Investment Act, the declines in the Australian property market and potential Capital Gains Tax for investors.  Combined with strong listing levels but lower sales volumes has led Auckland to be holding 3 weeks of stock above average - which indicates a buyers market - but only just.  On the contrary though, Auckland has a housing and rental property shortage as well as low interest rates.

It will be a year where choosing to align with the best available property expert will be rewarded.