How to Buy a New Build: Your Guide to Buying & Investing

Are you looking to buy or invest in a property but are tired of settling for outdated homes that need endless renovations? New build houses in Auckland offer the perfect opportunity, providing modern, high-quality spaces to suit both first-time home buyers and property investors.

At Oaks Living, we specialise in stunning developments across Auckland and focus on providing a hassle-free home-buying experience. Join us as we delve into how to buy a new build home, walking you through the process and identifying whether it’s the right investment opportunity for you.

What is a New Build?

So, how does buying a new build work? Well, first we must understand what constitutes a “new build.”

New builds have been popping up all over Auckland and the rest of New Zealand, helping to meet the country’s growing demand for housing. New builds are brand-new, freshly built homes with no previous occupants. Both investor and first-home buyer new builds offer several advantages, including:

Modern Features: New builds feature the latest designs, materials, and construction techniques, offering modern layouts, open-plan living, the latest technology, and contemporary fixtures.

Low Maintenance: Because they’re brand-new, new build homes require minimal maintenance and are built to be more durable compared to older properties.

Energy Efficiency: By incorporating energy-efficient design elements such as double glazing and efficient heating and cooling systems, new builds can reduce energy bills and contribute to a cleaner, greener New Zealand.

Compliance with Building Standards: New build properties are future-proof, adhering to the latest building codes and regulations, ensuring structural integrity and compliance with local standards.

Potential Tax Savings: Depending on your circumstances, you may be eligible for tax deductions related to the purchase of your new build, such as interest on a mortgage or depreciation.

Is Buying a New Build a Good Investment?

Investing in a new build is about more than simply owning a shiny new space. It’s about the several benefits that come along with the investment. However, whether it’s a good investment for you will depend on several factors.

New builds are a hot commodity if you’re looking for rental income. Their modern features and convenient locations attract quality tenants and command higher rental rates.

When determining whether buying a new build is a good investment, it is important to consider the local market conditions, the specific location, and your individual financial situation. For example, if the property is in a rapidly developing area, its value may appreciate significantly over time. However, selling or renting the property may take longer if the market is saturated with new builds.

Additionally, the cost of new builds can be higher than that of older properties, so weighing the benefits against the initial investment is crucial. Ultimately, whether it’s a good investment depends on your long-term goals and financial circumstances.

What are the Common Roadblocks of Investing in New Builds?

Delays and rising costs due to market fluctuations, supply chain issues, or unforeseen circumstances.
Market volatility can impact property values and rental yields.
Regulatory changes can affect property use and value.
Interest rate fluctuations can influence financing costs.

Oaks Living’s property portfolio offers investors a more secure and stable investment opportunity by mitigating risks associated with market fluctuations, regulatory changes, and interest rate fluctuations. Our focus on prime locations, rental demand analysis, and flexible financing options helps to protect investors from market volatility and interest rate changes.

What Incentives Does the Government Offer for New Builds?

New Zealand has a range of government incentives to make purchasing a new build more accessible and affordable. These incentives aim to encourage home ownership, stimulate the housing market, and support the construction of new homes.

Incentives for First-time Buyers Include:

First Home Grant: A cash grant provided to eligible first-home buyers to contribute towards a new build’s deposit or purchase price. The grant amount depends on your income and the property’s value.
First Home Loan: A government-backed loan that allows eligible first-home buyers to purchase a property with a deposit as low as 5%.
KiwiSaver First Home Withdrawal: Eligible KiwiSaver members can withdraw their savings, including the government contribution, to put towards a first home deposit.

Incentives for Investors Include:

Tax-Deductible Interest: Investors can claim a tax deduction for the interest paid on a loan used to purchase a new build.

New Build Exemption: In some cases, investors may be eligible for a tax exemption on the sale of a new build property.
Rental Income Tax Credits: Investors may be eligible for tax credits on rental income derived from a new build property.

How Does Buying a New Build Work?

While the process can vary depending on your circumstances, here is a general look at how to buy a new construction home in New Zealand:

Research and Consultation

Before committing to a property, identify your needs and preferences:

Consider factors like location, size, budget, lifestyle, and any desired features you want the home to have.
Think about the proximity to amenities like schools, public transport, parks, supermarkets, and more.
Take your time to understand local regulations, zoning laws, building codes, and other specific requirements for new construction.
Research market trends and compare prices of similar homes in the area.

Talk to our team about your needs and preferences to find a property that fits your investment goals.

Selecting the Property

Timing, location, and market factors are crucial when investing in new build townhouses or standalone properties. Consider these key points:

Location and Growth Potential:

Choose areas with strong infrastructure and economic prospects, such as Auckland.
Look for up-and-coming areas undergoing regeneration or with planned improvements.
Consider proximity to transport hubs, employment centres, and well-regarded schools.
Seek locations balancing urban amenities with natural attractions.

Market Analysis:

Assess property type demand and potential rental yield.
Analyse market trends and economic indicators.
Research seasonal considerations; New Zealand’s market is busier in spring and autumn.

Financial Considerations:

Explore mortgage options and deposit requirements.
Consider off-plan purchases for better prices and customisation options.
Be aware of potential deals during economic downturns or at the end of developers’ financial years.

Investment Strategy:

Align your investment with your financial goals and risk tolerance.
Balance short-term opportunities (like quieter winter months) with long-term growth potential.

By carefully evaluating these factors, you can make an informed decision and increase your chances of a successful property investment. Remember, the best time and place to buy ultimately depends on your personal circumstances and thorough market research.

Secure Financing

The next step of how to buy a new construction home is to assess your financial capacity and determine how much you can comfortably invest in a new build. Consider your income, savings, and any existing debt you’re facing. Once you understand your financial position, you can explore different mortgage options and compare interest rates, loan terms, and other fees.

It’s wise to secure pre-approved financing from a lender before making an offer on a property. This can strengthen your negotiation position and help you find a financing solution that aligns with your investment goals and current financial situation.

Construction Process

Throughout the construction process, building inspectors conduct regular inspections to ensure compliance with regulations and quality standards. At Oaks Living, we provide updates to purchasers and investors on the progress of their new build terraced houses or other development.

Once complete, we’ll conduct a final inspection to ensure the development meets all requirements before handing the property over to you.

Final Payment

Once construction is complete, a final property inspection will ensure the new build meets the agreed specifications before you make the final payment, usually upon receiving the Certificate of Completion. Ownership of this affordable new home will be transferred to you after completing the purchase process.

Tenant Management

You’ll need to manage tenant arrangements if you plan to use your new build investment for rental income. This process may involve sourcing tenants independently or hiring a property management company to handle the process on your behalf.

A property manager can oversee advertising, vet tenants, collect rent, and address maintenance needs. If properly managed, the rental income can begin soon after the property is tenanted, ensuring a steady return on your investment while complying with local regulations, such as New Zealand’s Healthy Homes Standards.

Ongoing Maintenance

Beyond tenant management, a property manager can handle maintenance, repairs, and other day-to-day tasks. With their assistance, you can save time and effort, allowing you to focus on other, more important aspects of your investment.

To monitor your investment’s performance, track rental income, property value appreciation, and any tax benefits associated with owning the new build. Regularly monitoring these aspects will help you assess the overall success of your investment to inform future strategy decisions.

Invest in a New Build with Oaks Living

Is a new build home a good investment for your portfolio? Don’t miss out on this opportunity to secure your piece of Auckland’s growth. Explore Oaks Living’s portfolio of developments built for Auckland’s future.