Why first home-buyers should build instead (Part 1)

We know building can be a scary process, even more so if you’ve never owned a home before. So we’ve talked to our NZCB regional presidents about why that is and things to look out for. They had so much great advice, that we’ll split it over two months. This month we’ll cover why now is a better time than ever to build your first home and what to be aware of if you’re buying off the plans (more commonly known as a house + land package).

We all know New Zealand has a housing shortage. Even with COVID-19, there is so much demand for Kiwi houses that prices don’t seem to be letting up, making finding your first home a mammoth task. Which is precisely why now could be as good a time as any to build your first home instead.

We know building may seem even more daunting than all those open homes, so we asked our regional presidents, who all have years of experience in the building industry, why it’s a great idea. Here’s what they said.

“Now, more than ever, is the best time to build your new home,” says NZCB Member Dave Gunter of Coastal Designs Ltd in Motueka. “Bank interest rates have never been this low and the banks have removed other deposit restrictions. It often works out only a fraction more than you pay in rent to have a mortgage, and you’re paying off your own home, not someone else’s.”

NZCB Member Richard Poff of RTP Builders in Canterbury agrees, but warns to be careful about financing. “Borrowers must stay within their borrowing limits – so have a healthy deposit, sufficient income to service the loan, and be realistic on what you want.  There’s no point dreaming of that ‘Grand Design’ when you really only need a three/four bedroom ‘well-built’ home.”

NZCB Member Mike Craig, of MC Builders in Waikanae, says if you can afford to build it will give you the assurance that your new home should be free from faults. “Not only that but your home will be brand new, so no maintenance for a while and you can add your personal touch from day one. If you are in a reasonable area, resale of a new home should be a lot easier and most of the time new subdivisions have schools nearby, along with parks, public transport and other amenities.”

But the benefits don’t stop there.  NZCB Member Ian Chamberlain, of Chamberlain Carpentry and Joinery in Taupō, says another advantage is that you can design your home to suit your own requirements and needs.

“Your home is your biggest asset. Houses and land are always a good asset to own, especially if you’re living in it – rather than relying on a landlord to maintain your house as a healthy home. People are gradually becoming more aware of the importance of needing a better quality building envelope for their home. If you build, you can make it healthier to live in all year round, as long as you up-spec from the minimum building code.”

Okay, so now we’ve convinced you to build, we asked our team of experts what to be aware of when buying a house + land package.

Mike says it’s important to remember you will only get a limited amount of choice – these packages use specific material supply chains to bring pricing down.

He warns against other fishhooks, too. “Straight out of the gate, you get a smooth-talking salesperson (who is usually on commission) and after you sign you are handed over to someone else, so you need to build a new relationship.  Your choice of land is limited, as most of the time the deals are packages they have with land developer. Then you do not get a choice of builder, or know how good his workmanship is.”

But it’s not all bad, he says. “Despite all that, they can work really well because spec builders have jobs finished and you just move in, no stress.”

Ian says it’s important to make sure the plans you choose suit your living requirements now and going forward. “You may need to accommodate additional family members – children, grandparents, grown up kids returning (not so) temporarily home.”

He also says to check the house design is suitable for getting the most thermal gain from the sun.

Richard says while you should make sure your home meets your family’s needs, it’s also important to remember variations come at an extra cost, which can lead to disputes or cost/budget overruns.

“Building ‘off the plan’ may have features that you either don’t need or don’t want. While not always, these sort of packages usually come from the ‘Group Home’ type of builder.  There are always compromises in the package – which are usually unstated and hard for a first timer to spot, so it pays to get advice from an external expert.”

Dave agrees and says it’s important to make sure you look into exactly what is included in the build.  “Get someone who you might know who has built before to help look over the information the builder may have supplied. Ask for a full breakdown of costs. Always try and avoid PC Sums as these can really upset the budget. Always try and get everything decided and fully priced before you sign the dotted line.”

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