Buying off the plans

Why buy an apartment or townhouse off the plans?

Not only do you get a brand new property, built to the latest building code, but the price is fixed at the time of purchase. You also get the opportunity to buy into an exciting new development or precinct. Tenants love new builds, so buying off the plans is a great investment choice too.

However, not all developments are created equal, and the array of options on the market can be daunting.

Here are 10 things you should investigate before buying off the plans:

1. The pedigree and track record of the developer

You're backing them to complete the project, to the standard they’ve promised. Do your research, inspect other projects they’ve done - make sure they have a good reputation.

2. Location, location, location

This doesn’t change with apartments - in fact it’s more important. Think about how close you are to local amenities, cafes, shops and education providers. What’s happening in the area? How much other development and investment is going on? Where are the transport links? 

3. What makes the development stand out from the rest?

Make sure you’re buying something with unique features, that isn’t the same as all the other developments and fits your needs. This includes size, quality, location, views and carparking. Make sure you’re buying into something that will appeal to future tenants and buyers.

4. Is it built to meet or exceed minimum standards (NZBC)?

Check all the details - fixtures and fittings, wardrobes, floor finishes, balconies, parking and communal spaces - carefully.

5. Soundproofing

The minimum standard in New Zealand is 55 STC (sound transmission class) and IIC (impact insulation class). Aim for above the minimum if you can - 65 STC/IIC is great and will make a huge difference to the enjoyment of your space.

6. The size and layout

Make sure you understand how big your apartment or townhouse is actually going to be. Check the square meterage. Remember this will include ‘wasted space’ like hallways and cupboards. Furniture shown in marketing materials can be deceptive. Make sure you ask what size beds are placed in the bedrooms.

7. Choose your outlook carefully

Are you going to get plenty of natural light? What about sun? Will your apartment be blocked by a future development? Do you want views? If so, city or water? Think about these things carefully - you can’t change a view.  Obviously the price will increase as the view gets better.

8. Do your due diligence

Make sure you thoroughly investigate the body corporate; check that the annual fees are realistic and will cover expected maintenance. Read the rules - there may be restrictions on pets and how you use areas of the development.

9. Triple check your contract

Get good independent legal advice. Make sure there is a solicitor's approval clause in the contract, and if not, ask for it to be inserted. Ask where the deposit will be held, what happens to the accrued interest, what is the length of the conditional period, if there's a sunset date (when the development has to be finished by) and what happens if extra time is needed?

10. Security and safety

Ask about security and safety features, such as sprinklers, fire escapes and extinguishers. Make sure the developer isn't cutting corners.