With the housing market recovery now underway, buyers are in the privileged position of having choice across a higher level of sale listings, but it’s unlikely to stay like this for long.

“There’s a good selection of homes for sale, including both new builds and existing homes. However, since the start of the market correction, we’ve seen the pipeline for new builds shrink and with sales now picking up, it’s likely the supply of new homes for sale will become tighter over the course of 2024,” says Chris Farhi, Bayleys Head of Insights, Data & Consulting.

Sentiment data recently captured by the Bayleys Insights & Data team shows that developers and their advisors continue to be concerned about the risk associated with funding and interest rates, and whilst construction activity is reducing, development costs are still persistently high.

This means the cost for new build housing is unlikely to reduce.

“While there’s always uncertainty, it feels like the next six months will be a good cyclical buying period given strong migration, and the tight physical supply of housing around NZ,” says Farhi.

So with a trend of reduced construction and a slowdown on consents set to continue, buyers are being encouraged to purchase new builds before a supply shortage starts to pinch.

WHY BUY NEW?

“You're getting a warm and healthy home, and you're getting a property that’s been carefully planned,” says Bayleys national director of projects Suzie Wigglesworth.

“Well-thought-out designs from the top developers also make excellent use of space and incorporate features that are often not found in older homes such as improved storage and “third spaces,” for work from home.

Wigglesworth says new apartment offerings continue to improve, and right now what you’re buying gets you much more than just a two- or three-bedroom living space.

“We've seen a rise in delivering exemplary residential apartments that no one has ever seen here in New Zealand before.”

“It’s now no longer just about buying an apartment, it's about what else is wrapped around that offering. So it might be communal spaces, and spaces where people can extend their living like shared workspaces, community gardens or rooftop amenities.”

Both entry-level and high-end apartment developments are incorporating significant additions and improvements.

“At the higher end, what we've seen is the availability of a 24/7 concierge and improved parcel delivery services.”

Wigglesworth says right now, there’s a high level of interest in new builds especially off-plan or near-built spaces.

WHERE ARE THE ONES TO WATCH?

Wigglesworth says availability depends on where you want to buy.

“In the outer fringe suburbs of Auckland, for example, there's a fair amount of new build stock that's available that you can buy today and move into tomorrow. But in other areas there’s very little.”

The newly developed Elizabeth Towers in Tauranga is a prime example of a full-inclusive offering for buyers.

“There are 97 apartments and 23 townhouses that have a shared community podium, which offer a swimming pool, gym, and community lounge.”

Another development to watch is Five Mile Villas in Queenstown.

“It's roughly 226 standalone townhouses. Two-bedroom, one-bathroom homes with an external car park in the Remarkables park area close to the airport.”

With a simple but effective design and a lower price point, the focus is on servicing people looking for more affordable options across the Queenstown market.

“There are a lot of people who have migrated or chosen to move to Queenstown, but can't afford to get onto the property ladder there. So this is a really great option for first-time buyers, but also for worker accommodation.”

The development comes at a great time with new data from CoreLogic revealing first home buyers hold a strong presence in the market, with 26 percent of purchases across January and February this year.

“These properties would also suit investors, or those seeking a low maintenance holiday home in a spectacular location.”

WHAT TO CONSIDER WHEN BUYING?

In the first instance, it’s important to visit a good variety of homes so that you can understand what size and configuration will work best for you.

“As you visit more homes you’ll get a better sense of sizing and features, which will help to hone your wish list. You might also find that certain layouts will be better suited to your lifestyle, or that a smaller home will work for you in which case you could save a lot of money”.

There are a few things to consider when purchasing a new build, especially if you’re buying off the plans.

“You need to be conscious of what the developer’s history is, and what else they’ve worked on.”

“Keep a close eye on the conditions of the agreement, including whether there’s a requirement for the developer to sell a number of units before they get the green light to go ahead, and what their construction timelines are.”

Wigglesworth says it’s important to seek legal advice and read the fine print before signing the dotted line.

ON THE FENCE? WHY YOU REALLY SHOULD BUY NOW

Wigglesworth says because of a reduction in the number of consents being issued it’s unlikely we’ll see supply like this for a long time.

Stats NZ data revealed 37,239 homes were consented for construction during 2023, 25-percent lower than the count for 2022.

“In the short term that won't have a noticeable effect on buyers, but in the long term, it certainly will.”

Wigglesworth says because of that right now is the best time to buy and is encouraging anyone sitting on the fence to dive in before the availability of new builds lessens.

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