Knowing your property priorities

There is a lot to think about when you’re searching for a property to buy. It’s helpful to focus on what you want and need, now and in the future.

Summary of important things to know
  • What sort of property do you need now, and what are you likely to need in the next 5 to 10 years?

  • Identifying your priorities helps you figure out what’s non-negotiable and what you’re willing to compromise on.

  • Are you willing to do work on a property, or do you want all the work to have been done for you when you purchase it?

  • Think about where you would like to live. Is location more important than the property itself?

  • Are you interested in buying off a plan, or do you need a property you can move into now? Would you consider building a home or moving a home onto a section?

IMAGE: Wishlist

Buying a section, buying off a plan or relocating a home

Many people will buy an existing house, but there are alternatives that you can think about when you have decided to buy property.

Buying an empty section

Buying a section and building your own home is a good way to make sure you get exactly what you want in a home. There is a lot to think about.

  • Have a good idea of what type of house you want to build before you commit to a property.
  • Check the building covenants in the area. There may be restrictions that mean you can’t have some of the features or materials you were hoping to include.
  • Check if any building plans have been submitted to the council. What is the zoning for the area?
  • Check if the costs involved in getting services such as sewerage and power to the property if these aren’t yet in place.
  • If the section isn’t flat, there may be earthworks costs to consider before you can build. Get advice from an engineer about this because these costs can be significant.
  • When it comes time to build, make sure you know your rights and obligations with tradespeople and the council so you can avoid costly mistakes and delays. To find out more, check out Ministry of Business, Innovation and Employment's website(external link).

Buying off a plan

Developers who are planning to build apartments or a town house complex will often sell the units off the plan before the construction has started. Buyers can view images or sometimes visit a show home to get an idea of what they’re buying. Generally, buying off a plan means paying a deposit upfront to secure the property. The remainder of the money is due on completion of the build.

There are benefits to buying off a plan. You are signing up for a new home that should meet all the latest building specifications, and you are buying something at a set price with an initially low outlay (the deposit). A long settlement period gives you time to save money for the final payment. If the market is buoyant, the property may also increase in value over this period so you will be getting more than what you paid for.

However, there are also risks to consider:

  • If market values fall, you may be committed to paying more than the property is worth.
  • You are entirely reliant on the developer and construction firm so it’s important to do due-diligence. What is their reputation? Examine their credentials - how long have they been developing properties? Take a look at any previous developments they have been involved in.
  • Some lenders will place limits on home loans to people buying off plans.
  • Check all the details to make sure the finished property will meet your expectations. Ask questions about the drawings or show home. What size were the beds in the promotional shots? Is the building to minimum standards or is the specification above and beyond? Ask about the soundproofing. Check security and safety features. Ask for detail about the common areas.
  • The build may take longer than expected which may mean you are paying rent for longer than you had budgeted for. It may also mean you need to move to a new rental property.
  • The interest rates may go up or lending criteria may change. Discuss these risks with your bank or lender.
  • The completed complex is likely to have a body corporate. Find out how this will be managed and the costs you will need to budget for.
  • Some contracts are designed to allow buyers to choose the floor plan or the fixtures and fittings. Others may allow the developer to change the layout without checking with you first. It’s important to understand every aspect of the property.
  • It’s important to engage a lawyer to help you understand all the details of the contract. Check to see if there is a ‘sunset clause’ that specifies what will happen if the development is not finished on time. You should also ask what will happen if the developer goes into liquidation and the project is sold to another company.

Relocating a home

Purchasing an empty section and moving an existing house onto it is an option to consider:

  • Check council regulations. An old house moved onto a new section may be considered a new house and will need to meet new house standards for insulation, wiring and so on.
  • Research the cost of moving a house, including hidden costs, and check that it’s not cheaper to build a new home.
  • Check what is required to prepare the section for the new house, in terms of a foundation or piles and also getting services to the section.
  • Talk to your bank about financing the project. Some banks will not finance relocation.

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The property buying process

The property buying process