Kiwibuild Problems and Buying From a Plan

According to this story from Stuff and many more in New Zealand news media, many of the Kiwibuild homes, the answer for young people, first home buyers and those with low incomes, are failing to sell.

I don’t know the circumstances as to why people aren’t buying them when there is such a housing shortage. Some people are saying that the prices against market rates are still a little on the high side, others are saying that people want something more tangible than a plan, committing to a property that has not yet been constructed.

The new Suburb of Long Bay under Development

I was surprised that Kiwibuild was building in places like Te Kauwhata, given the main growth in the area is Baby Boomers leaving Auckland, who are looking for a mortgage free lifestyle change. Many are looking at reducing debt and downsizing and while some of these people escaping the city can afford slightly higher than local market rates, that’s not their choice. It’s about freeing up capital to retire on.

Some perhaps paid too much for their country homes, given the evidence that median prices have increased, but that may be lack of experience on the part of the buyer or great Real Estate Agents getting a good deal for their vendors, but buyers are getting a bit more wise to that.

I can understand why country houses seem cheap to someone who has just sold in one of the most expensive cities in the world to live in. That house that is half the price of the one you left, seems cheap, but it has to be seen in relation to other houses in that town.

In my new eBook ‘5 Top Mistakes People Make When They are Buying a House‘ one of the things I wrote about which is intangible, but hugely important and that’s neighbors.

Many of these houses are built so close together with 3 floors and very little land. There are sections under 400 square meters, where once the house is built, you could high five your neighbour from your bedroom window! 

Now unless you really love your neighbors, that’s not necessarily something you want to be able to do. In fact it could be the last thing you want to do. You have know idea who your neighbors are going to be.

In many cases these properties are apartments or townhouses and most Kiwis haven’t experienced that kind of living. They’ve been in hotels and motels, but if they have a bad experience with noise, they know they are going home afterwards. You can’t go home from your home.

Now buying in a new subdivision isn’t anything unusual, but there are differences between buying on paper, to buying in a subdivision that you can visit and where some of the houses have already been built. You are usually buying from a group home developer with a long track record, where you get advantages from their volume purchasing power when they are building many houses on a larger piece of property that they invested in.

They can tell you something about the people who have already bought the houses being built next door or over the road. It’s not typically something people ask about, although I have often heard sales people talk about things like whether the people next door have kids, pretty important if you have kids yourself and want them to be able to have local friends to play with as well as more people looking out for their safety.

Long Bay in the image above is at the higher end of the market so you at least have an idea of the income bracket of the owner, although a lot of them are also rental investments. These are renting at $800-$1,000 a week, but many have 5-7 bedrooms so shared amongst flatmates, that’s cheap and many people without kids would jump at the chance of renting a new home with built in audio systems, fibre and modern appliances.

“I want to live next door to people like me” is a common catchphrase, yet it is remarkable (but no surprise to me) that when I did a pulse survey of people, asking if they had talked to the neighbors prior to buying their latest home, over 90% said they hadn’t. Several did say they now wished they had!

There are obviously benefits of buying a house that has yet to be built, IF you have some say in the plan. You might want more storage, you might want one of the rooms set up as an office. For me as a musician and also recording training courses, I’d want one of my rooms to be soundproofed. That’s a lot cheaper to do during the build than after. It is a benefit that you can at least to some degree customise the building plan to the way you wish to live in the house, that way you have zero renovation costs afterwards.

It’s something that always amazes me when I go back ‘home’ to Holland. You will see rows of houses that look almost identical on the outside, but inside they are all totally different. Some might be traditional and relatively unchanged from what they might have looked like 50 years ago, others are open plan and ultra modern in every way possible. Many people spend a fortune gutting the inside and starting again. 

Ironically, many Kiwis leave the renovations until they are going to sell, to make the house more attractive to a buyer. Personally I’d not spend that money and invest a little on bringing in a staging company instead who can make the existing house look a million bucks, but that’s another story. In fact I’m waiting on one to provide a guest post for me.

But back to the neighbors. if you invest everything you have and more in a new home, if you don’t get on with your neighbors once everyone has moved in, your castle could become your jail. Whether it’s loud parties, teenagers racing their cars up the street, immigrants who don’t speak English, too many kids, no kids, messy yards, or perhaps you want to have parties and BBQ’s and enjoy an open house environment. There is no right or wrong, it’s about fit.

Once you are in, it’s too late. Plus, when you go to sell, the house now does have neighbors and if they are the kind most people won’t want, you now have a major problem. You are likely to be going to resell at some stage, so best to think about that now. 

As to Kiwibuild, I hope things work out, because we need new housing stock, especially for first home buyers. I just hope that they are consulting with the market and not just throwing money at a problem and expecting that people will want what they offer.

Finally, in case you don’t have a Kindle, or don’t want to buy my new eBook, there is a way to get a free copy. Just point your mouse at and you can download a free PDF version and get some more useful information from my eList. 

About Luigi Cappel

Writer for hire, marketing consultant specialising in Location Based Services. Futurist and Public Speaker Auckland, New Zealand
This entry was posted in ageing, Auckland, Buying a Home Research, Buying a House, Buying a House Mistakes, eBook, Family, Finance, First Home Buyer, home, home loan, house hunting, Mistakes Buying a House, Money, mortgage, neighborhood crime, Neighbors, Neighbours, New Zealand, New Zealand Real Estate, Paying too much for a house, property, Real Estate, real estate agent, Selling a House and tagged , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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