Is a New Build In Coatesville The Right Option For You?
When you are in the market for a house, whether it is a first-time buy or even looking for an additional investment property, people tend to think about buying an existing house. However, going down the route of a new build is also well-worth thinking about. TV shows are littered with stories of delays and budget over-runs but that is when people are renovating. A completely new house build is a very different issue since we are building on a bare piece of land rather than having to work around existing infrastructure and boundaries. But there are other reasons too. Here we explain why it makes a lot of sense to think about a new build in Coatesville if you want a new home.
Easier Deposit And LVR For A New Build
The first reason is the Loan-to-Value Ratio (LVR) as set out by the Reserve Bank. The LVR is lower for new builds (10%) than it is if you are buying an existing property for yourself, typically 20%, or for investment then it is a 30% down-payment. You can see more details here https://www.rbnz.govt.nz/financial-stability/loan-to-valuation-ratio-restrictions.
Even though the financial security is similar to buying an existing home, i.e. the security on the mortgage deed, one reason for this distinction is that with a new build you are adding to the housing stock rather than simply transferring it. The Reserve Bank and many other commentators have said that a restricted supply is one of the reasons for high house prices so it makes sense that they will offer an advantage to someone willing to increase the stock of housing in Auckland.
The different percentage may not sound a lot until you put it into dollar terms. With the median house price in Auckland currently being about $850,000, if you were buying an existing home for you to live in, you would have to find a deposit of $170,000. Instead, if you go the new build route, then you only need a deposit of $85,000.
For investors, the news is better still. They can still opt for a new build with the same 10% deposit of $85,000. If the same investor buys an existing property, the deposit they need would be 30% or $255,000. This difference is massive and should make every investor in property look seriously at the smarter commercial option of new builds.
A More Modern And Better Appointed Home
The next benefit of going the new build option is that your property will be much better appointed than buying in effect, a second-hand home. The fixtures and fittings will all be brand-new, and you can choose the most modern designs according to your budget.
The kitchen and bathroom will have all the latest styles to make your home a talking point. And you can easily include features like a home theatre, playrooms, or a separate granny-flat.
Bedrooms and living areas can be designed to the layout and specification that you want rather than having to accept the best option when looking at open homes.
Less Maintenance With A New Build
Another big benefit, especially for younger families that don’t have a lot of free time, or for senior couples who don’t have the same desire, is less maintenance. Your home will be freshly decorated so you don’t need to look at that for five years. The walls, kitchen and bathroom will all be newly fitted-out with new appliances which will be under guarantee so again no need to worry about repairs or maintenance.
Better Quality Tenants For A New Build
If you are an investor, then with a newly built house, with higher specs for decoration and appliances, you will be able to attract a better-quality tenant. They will likely look after the property better and you or your letting agent will be able to be far more selective about the tenants you accept. For example, you could easily let a brand-new build to overseas corporate clients looking for a two-year stay in Coatesville. And with better tenants, you will probably be able to charge a higher rent too.
The Various Options Available When Purchasing a New Build
There are many ways of buying a new build.
The hardest by far is to purchase a piece of land or work with a property you already own and try to manage all the construction and installation work yourself. You need lots of time, knowledge, patience and a very understanding family if you choose this route. With this option however you do have increased flexibility in the design and overall finished look of the new build, as you have the freedom of selecting the builder and architect for the project.
You could buy off-plan but this is not as simple an option as many people think. We have seen a number of bigger property developers go bust in recent months. This is mainly because their financing was wrong and their costs were under-estimated. Often people buying off-plan have to come up with significant additional money before they can take possession of their home. These extra amounts can be six-figures!
A third option is a “House and Land Package”. These are offered by some of the national building companies and don’t have the funding problems of big developers because the carrying cost has been the land they bought years ago. The funding for the house only comes into play when a buyer comes along and they are the funders, not the building company. The two main problems with this option are that there is no choice about the location and is often on a development with other houses. The second problem is that they offer a limited number of designs to choose from. So if you want to have a purpose-designed home, this option is not for you.
Choose A Builder For An Architecturally Designed, Purpose-built New Build
If you want a bespoke design new home the only option is to have an architecturally-designed home built. The easiest way to do this is to start by finding a residential builder for new builds in Coatesville. This is for two main reasons. First, they know the area and can give you a ball-park estimate to start with so you know the potential size of your project cost. Second, they usually know a number of draughtsman or architects that they can recommend which will save you a lot of time and frustration.
Finally, a good house builder will also manage the entire project for you. Some people try to project manage themselves and it generally ends up costing them a lot of extra money and certainly a huge amount of stress.
Financing A New Build
Arranging finance for a new build in Coatesville is quite easy and straightforward. The banks are doing this all the time, and your builder will be paid in the increments agreed to for completing various stages of the project.
This means you are not paying the mortgage for the total cost from the start, but it increases as the value of the property increases with completion of the next stage.
If you are looking to build a new home in Coatesville or nearby, please give us a call. Not only are we local to the area, we recognise this is the biggest financial investment you are likely to undertake and therefore are committed to providing you with all the help you need to have a stress-free build. Cain Built can take care of the entire building process from start to finish, from new build house plans and designs right through to completion, so you can relax knowing you’re in good hands. Give us a call on 0800 224 628 or if you prefer, you can email us at firstname.lastname@example.org.