New Builds
Buying off the plans when you are downsizing: what to watch for
Buying a new build off the plans can work beautifully — or leave you waiting. The difference is almost always in the contract and the timing, not the show home.
New builds are genuinely appealing when you are downsizing. Everything is warm, dry and insulated to a modern standard. There is nothing to renovate, nothing to paint, and no forty-year-old wiring. Around Porirua and the wider Wellington region there is a steady supply of townhouses and standalone homes being built with exactly this buyer in mind.
Buying one before it exists is a different exercise from buying an existing house. Here is what I would want you to check.
1. Understand the timeline, then add to it
Off-the-plans contracts usually settle after the title is issued and the home is complete, with a Code Compliance Certificate from the council. Each of those steps can move. Subdivision titles get delayed, weather happens, subcontractors get held up.
Ask the developer for an estimated completion date and the contractual date, because they are often not the same. Then plan on the basis that it could be later.
2. The sunset clause matters more than people realise
Most off-the-plans agreements contain a sunset clause: a long-stop date after which either party can cancel if the development is not finished. Read it carefully and ask your lawyer two questions. Who can cancel, and what happens to your deposit if they do?
Some clauses allow the developer to cancel and resell at a higher price in a rising market. That is exactly the sort of thing you want flagged before you sign, not after.
3. Know exactly what you are getting
The specification schedule is the real description of your home — not the brochure and not the show home. Get it in writing and check the details that matter to you: insulation and glazing, heating, ventilation, kitchen appliances, tapware, flooring, fencing, landscaping, letterbox, clothesline, driveway surface.
Look for substitution wording such as "or similar" and ask what the limits are. Ask whether the show home finishes are standard or upgrades. Ask what is excluded altogether, because window coverings, heat pumps and landscaping are common omissions.
4. Check the title type and any ongoing costs
Is it freehold (fee simple), unit title, or cross-lease? Unit titles come with a body corporate, an annual levy, a long-term maintenance plan and rules you will need to live by. None of that is a problem, but it is a cost and a constraint, and you should see the numbers and the rules before you commit.
Ask for the proposed body corporate budget and levy, and ask what the levy covers. Ask about shared driveways, visitor parking and rubbish arrangements.
5. Deposits, progress payments and where your money sits
Ask how much deposit is required, whether it is held in a solicitor's or agent's trust account, and whether any of it is released to the developer before completion. Ask whether there are progress payments or a single payment on settlement.
If you are using a bank, talk to them early. Pre-approvals expire, and lenders will usually want a valuation close to completion — which in a flat or falling market can create a gap between the price you agreed and what the bank will lend.
6. Line up the sale of your existing home carefully
This is the part I spend most of my time on with downsizers. You have a settlement date on the new home that may move, and a family home to sell.
There are a few workable approaches. You can sell first and rent for the gap, which is the safest financially and the least comfortable practically. You can sell with a long settlement, which suits some buyers. Or you can arrange bridging finance, which costs money and needs to be approved in advance. What does not work well is assuming both dates will land neatly on their own.
7. Ask about the builder, not just the development
Find out who is actually building it. Look for membership of a recognised guarantee scheme, ask what warranties come with the home, and ask what the defects process is after you move in — who you contact, for how long, and how quickly they respond.
Building work in New Zealand also carries implied warranties under the Building Act, and your lawyer can explain how those sit alongside any builder's guarantee.
8. Go and look at what they have already built
The most useful hour you can spend is walking around a development the same builder finished two or three years ago. Talk to the people living there. Ask what has needed fixing, how the heating performs in a Wellington winter, whether the parking works, and whether they would buy again.
A short checklist before you sign
- Your lawyer has read the agreement and explained the sunset clause.
- You have the full specification schedule in writing.
- You know the title type and any body corporate levy.
- You know where your deposit is held.
- Your bank has confirmed finance and understands the timing.
- You have a written plan for selling your current home.
- You have visited an earlier development by the same builder.
Get those seven right and buying off the plans is a very good way to downsize. Skip them and you are relying on everything going smoothly, which in construction is not a plan.
This article is general information, not legal or financial advice. Every off-the-plans agreement is different — please have yours reviewed by your own lawyer before signing.
Thinking about your own next move?
Blair is happy to talk it through — no obligation, no sales pitch.