When it comes to buying off-the-plan apartments, investing in an idea can be a difficult exercise. Here are a few things to be mindful of before you jump in
6 essential tips for buying off-the-plan apartments
The recent boom in real estate prices has seen a massive increase in buyer confidence in purchasing apartments off the plan, allowing you the chance to secure an apartment at today’s prices, with the flexibility of having some breathing space to secure your finances.
But buying a “concept” can be a difficult exercise, with a healthy imagination needed to fully appreciate design aspects of the finished build and vigilance regarding quality and legal variables. Add to that a market that has flattened in some parts of New Zealand, and the gamble of committing to a development that may not yet have resource consents or full financing can be a fraught process.
Here are a few things to be mindful of before you jump in and buy off the plan:
Research, research, and more research. You are essentially buying an idea that doesn’t exist in reality so an important first move is to check out the developer thoroughly. What is their track record for completing construction on time and to the quality promised, what are some of their other developments like… their pedigree and reputation are vital considerations.
2. Body corporate due diligence
This is important as this is going to determine how well the property is maintained, how decisions are governed, limitations such as pets and use of facilities, and how much you will be paying annually. Read the rules and also get your solicitor to check for any hidden surprises. Can dwellers festoon their balconies with washing or use them as storage areas? There are all sorts of detailed provisos that quality developments have that will ensure your investment is protected.
3. Standard of build
Look for developments that go above and beyond the NZBC of minimum requirements. Get precise information about finishes for floors, kitchen and bathroom cabinetry, fixtures such as tapware and light fittings, the exact size of balconies…all these details will make a huge difference to the look and feel of your apartment and its ongoing saleability.
Check out the soundproofing – this has important ramifications. The minimum NZ standard is 55 Sound Transmission Class (STC) and Impact Insulation Class (IIC). Aim for a build that has a higher rating – 65 STC/IIC or higher will have a big impact on your quality of life.
4. Location and special features
Proximity to motorways, transport links, cafes and restaurants, shopping and leisure activities are always the real estate mantra. Apartments tend to be part of areas that are experiencing revitalization or new developments. Be aware of what is planned for the area, and how that may affect your values going forward. It’s no use splurging on the apartment with the sea view or all-day sun if it’s going to be built out in a few years’ time.
Consider what the special features of the development are that make it stand out from the crowd. On-site facilities such as gyms, pools and communal entertaining spaces can be draw cards, but only if they are high-spec and well maintained. Size of car parks and storage facilities is also an important consideration. How does the size, location and specifications of your apartment compare with others in the area?
5. Layout and outlook
This is the wild card of buying off the plan. It is very important to get as much information on how your apartment will feel from something other than an artist’s impression. Quality developments will have display suites that you can visit so that you can walk around real spaces, see how design concepts are realised, how well space is utilised and the size of furnishings such as beds and couches that can be comfortably accommodated in living spaces. Make sure you thoroughly understand your outlook and aspect. Some developments have viewing platforms which can help you get to grips with how it will feel in reality.
6. Contract considerations
Don’t scrimp on solicitor’s fees when having the contract checked. Use an experienced, independent property lawyer to review the contract and ensure there’s a solicitor’s approval clause. Ask where the deposit will be held, and how accrued interest will be handled. What is the conditional period and when is the set date for completion? What are the provisions if the construction fails to meet the sunset period (time limit) and if the apartment specifications vary from the plans? It is vital to ensure all these variables are addressed appropriately in the contract so you are protected from any slip-ups.