Is buying ‘off the plan’ a good idea?

Vicki Holder
Is buying ‘off the plan’ a good idea?

A plethora of new apartments, terraces and townhouses have sprung up around the country with loads more still to hit the drawing board.

For these types of properties, developers must secure a certain number of pre-sales before banks will let the development go ahead and mortgage lending can be approved. Which is why ‘off the plan’ sales are launched ahead of construction.

SEE ALSO: Why investing in apartments is on the rise

For purchasers, buying ‘off the plan’ offers some great opportunities that don’t come with ordinary freehold houses. But there are some downsides. The key is to question what you’re getting into before handing over your cash. Because if you don’t do your research, you could end up with a very expensive lemon.


Check this simple beginners’ guide:


  1. You can get around the banks’ Loan-to-Value Ratio rules – which limit banks from having no more than 10 percent of their new residential mortgage lending on deposits of less than 20 percent.

  2. Yet get the chance to ride the rising property market – and make a profit without doing anything to the property between paying your deposit and the final instalment.

  3. By securing an apartment, terrace or townhouse early in the process, you can often choose the best one, well-located in the complex with the best views for better value because prices tend to start climbing as construction nears completion. You also often get to have a say on design and finishes to personalise the property.

  4. With a down payment of generally between 10% to 20% of the purchase price upfront, you gain flexibility. This must be held in a trust account. And you still have to prove you have finance to buy.

  5. When the apartment is complete, you get to live in a brand, spanking new home complete with all mod-cons and fixtures – without having to shop for them yourself.



  1. There is no physical property to view. Buying ‘off the plans’ means securing a property - before construction takes place. However many developers have show units that represent homes typical of what will be built.

  2. Many of the risks are ‘unknown’. Check out the sale and purchase agreement which are not usually standard contracts. They are specifically written with clauses that favour the seller. So it’s vital to get your lawyer to approve the document. Find out what changes, if any, can be made.

  3. You need to be careful to check out the developer’s and builder’s track record and credentials to be sure you can trust them. Otherwise, if you don’t get what you think you’re getting, you could end up in court.

  4. You need vision to visualise the finished product and everything that goes inside.

  5. Construction can take two to three years before completion. You need to be patient.


What’s available around the regions?

Now you know what you are doing, here are some apartments currently for sale ‘off the plan’.



As part of the award-winning Hobsonville Point housing area in West Auckland, the Sunderland precinct aims to set a new standard of living, with unmatched quality of design and attention to detail. Freestanding homes and townhouses start from $940,000.

132 Halsey is Auckland’s newest inner-city waterfront residential project. The series of buildings designed by Athfield Architects with many innovative green features includes 49 luxury apartments and boutique retail space on the ground floor.

Buying Off Plans Sunderland



These two bedroom brick townhouses in Deanwell should be completed around May 2016. In a well-established area close to good amenities, they are for sale at just $389,000.



Blake Lofts in Mt Maunganui are priced to appeal to investors, first home buyers and people wanting to downsize. One and two bedroom options are available and 22 of the 26 are priced under $300,000.



Crafted by Cymon Allfrey Architects, Verve Precinct on the corner of Victoria St and Peterborough St is the quintessential full service apartment complex, built to reflect the architectural style of New York apartments. An onsite showroom is available and a 10% deposit is required. One bedroom dual level apartments start from $399,000.



Victoria Precinct is part of the new Victoria Street Urban Renewal in Wellington. This latest development has 65partments across 14 storeys with a covered walkway through to Willis Street. All apartments include glazed cantilevered areas that extend out from the building. One bedroom apartments start from $350,000.

SEE ALSO: Why investing in apartments is on the rise


Looking for a new home?

Westpac has handy tips, info and mortgage calculators to help:


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