Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Guide to ‘Off the Plans’ Buying

FOR IMMEDIATE RELEASE

Guide to ‘Off the Plans’ Buying

Martin Dunn from City Sales believes a ‘property cycle’ has made buying off the plans a timely investment option.

Complex risks associated with buying property ‘off the plans’ are periodically outweighed by benefits unearthed by the ‘property cycle’. Martin Dunn from City Sales believes now is a time when property investors can prosper from buying ‘off the plans’ and gives advice on what to look for and what to avoid.

“Of the ten or so new apartment projects being currently marketed off the plans in the Auckland CBD, City Sales is involved with one of them”, says Martin. “We’re incredibly selective in what we sell – City Sales hasn’t supported any new builds since The Statesman in 2004. For us to be involved in a new development, we need to be certain that it ticks all of the boxes for us, and right now The Sugartree on Union Street does just that.”

Dunn places a great deal of importance on these boxes to tick, and compares getting it wrong to the Blue Chip debacle “Here we are, four years on from Blue Chip and we’re still trying to extricate terribly damaged families from a financial Armageddon.”

But Dunn believes that the time has come in the ‘property cycle’ when buying off the plans can be extremely rewarding.

“I believe the Auckland residential market is in a long term growth phase that will be slightly tempered in the coming two years by interest rate rises and political intrigue.

But the growth will continue relentlessly and the technical manpower to build for this growth is hopelessly inadequate. We don’t possess the trade skills and personnel to cope with the Christchurch rebuild let alone provide for Auckland’s growth.

I predict a steady continued growth in Auckland residential real estate and gearing into this market with as little as a 10% deposit in a rising market might put you in very good stead come settlement time.”

Dunn adds that a buyer must understand the risks completely before making such a commitment.

“When you sign that contract to buy something that does not exist, you are effectively contracting to the developer’s bank that on completion you will pay the $485,000 or whatever you’ve agreed to – and you can’t change your mind. You can get your lawyer to OK the documents by buying conditionally for say five days, which we generally suggest is prudent, but then you’re locked in.

No matter how friendly or approachable the developer is, don’t be lulled into a false sense of comfort. Your agreement will be immediately passed out of his hands to his bankers and if your personal situation goes pear shaped for whatever reason in the 12 to 18 months it takes to build your new suite, it is the bank you will be speaking to, not your friendly developer.”

City Sales has outlined further risks to be aware of when buying off the plans in a checklist below.

Is the development to actually go ahead? What happens to your deposit if it doesn’t?

Does the developer hold your deposit or is it protected in a lawyer’s/agent’s audited trust account until settlement?

Does the developer know how to develop an apartment building?

Does the successful tenderer construction company have experience in building apartments?

Does the developer own the land?

Are you buying through a ‘spruiker’ (unlicenced sales organisation) cribbing the law or a Licenced Real Estate Agent with all the protections that offers?

Is the size of your apartment clearly spelled out and do you understand the significance of what this means?

On what basis is the price demanded e.g. is this sale price justifiable with other new builds or is it out of kilter in comparison with what City Sales terms ‘the secondary market’ i.e. existing apartments. On this count, brand new suites built to more demanding construction codes are likely to be dearer than existing stock but… by how much and are you dealing with a broker who can justify this to you with day to day market facts?

If the developer/agent is touting potential rentals achievable and Body Corp charges can he/she demonstrate examples as to why those figures are justifiable?

Is the location pioneering or established?

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news