Why Invest in a New Build?
Pros and Cons of Buying a New Build as an Investor or Home Buyer
Are you planning to make a real estate investment and are struggling to choose between a new build or an old one? If yes, today, we are going to take you through the pros and cons of a new build. After reading this article, you will be able to make a wise decision.
New builds are often considered a good investment because of their low maintenance. But still, they are not the right fit for everyone.
They usually work best for investors who want a build-and-hold strategy rather than someone interested in investing in renovation.
So, in case you are wondering if a new build is the right fit for you, keep reading.
5 Pros of Investing in a New Build
When it comes to buying a home, there are usually two choices in front of a home buyer. You can either buy a new home or choose from the old ones available on the market. Considering how confusing this decision could be, we have come up with an article that will help you decide between buying a new home vs an old house.
In this article, we are going to explore the pros and cons of buying a new home versus an older one.
Pros of buying a newly built home
Buying a newly built home for sale comes with many benefits. Some of these benefits include:
- Lower Deposit
- More time to save
- New materials & build standards
- Healthy home compliance
- Low maintenance
These are some of the benefits of buying a new home that you must know about.
Lower Deposit
Currently, the Reserve Bank’s loan-to-value (LVR) requirements are way lower for the new build homes. This means that you only need a 20% deposit rather than 30% which is way lower and a game-changer for a investors.
| Buyer Type | Property Type | Deposit | LVR(Loan) |
| Owner-Occupier | Existing | 20% | 80% |
| New Build | 20% | 80% | |
| Investment | Existing | 30% | 70% |
| New Build | 20% | 80% |
Low Maintenance
One of the significant challenges that comes with buying an old house is that it requires continuous maintenance. This could be avoided by purchasing new-build homes for sale.
Time to Save More
Another benefit of buying a new home off-the-plan is that you just need to pay a smaller deposit as required by the banks, which leaves you more time to save while the house is being built. The good thing is that you do not have to start paying the mortgage until the home is complete.
New materials & build standards
Another highlight of buying a new home is that they are designed and built to meet the latest government building code and New Zealand Healthy Homes Standards. New building materials, techniques, fittings, fixtures, and technologies are used, which add to the benefits of buying a new home.
Healthy home compliance
When it comes to buying a new home, one of the benefits of doing so is that they are built to the highest building standards. For example, at Kiefer, we build homes that meet all healthy home standards to ensure the quality is not compromised. By complying with these standards, you can ensure they are energy efficient, which in turn means cost efficiency.
Exempt from Tax Restrictions (Good for investors)
New build investments are usually exempt from the revised interest deductibility policy that was introduced in 2021. Meaning, you will be able to continue to write-off interest costs against any income that was made from the property.
Quality Property means Quality Tenant
A new build often comes with greater rental appeal, which makes it a good investment choice. Tenants usually prefer new build because of several reasons like low maintenance.
These are some of the benefits that come with the decision to buy a new home. Right from meeting healthy home standards, lower deposits, and low maintenance, investing in the latest build homes for sale.
Cons of Investing in a New Build
There are several cons of buying a new build. Some of these cons include:
- You cannot renovate to add any further value
- The value of the new build often rely on market growth and capital gains
- Number of new builds is lower than the existing properties
- New builds are often more expensive than existing homes
For those who are looking for investment, new builds are considered a good choice. Right from lower deposit, low maintenance, and tax exemption,, there are several reasons why we recommend new build to investors.
This is not all.
If you are looking to buy a new home for yourself, new build is again a good option for all these reasons.
Luckily, if you are looking for a new home to buy, Kiefer has several ongoing projects around Auckland. Right from Papatoetoe, Manurewa, Mangere Bridge, to Pakuranga Heights, Kiefer has projects going around in all central suburbs of Auckland.
