01 Mar 14
How to buy off the plans
It’s that time again (for us) and it doesn’t come around often so listen up……….(or at least keep reading!!)…
There are currently about ten new apartment projects being marketed off – plan in our CBD apartment market and we’re enthusiastically involved with one right now, because we are very selective as to what we will promote and to me it ticks all the boxes.
And there are boxes to tick……………. If you get it wrong it can get nasty (a la the blue chip debacle where four years on we are still trying to extricate terribly damaged families from a financial Armageddon).
I say it’s that time again…….”For us” ……..because there are times in the property cycle when buying off plans can be extremely rewarding and I’m saying that time is right now.
But why and what are the risks?
When you sign that contract to buy something that does not exist you are effectively contracting to the developer’s bank (more on that in a minute) that on completion you will pay the $485,000 or whatever you’ve agreed to.
And you can’t change your mind.
You can get your lawyer to ok the documents by buying conditionally for say 5 days (and we generally suggest this as prudent) but then you’re locked in.
No matter how friendly or approachable the developer is (if you get to meet him) don’t be lulled into a false sense of comfort. Your agreement will be immediately passed out of his hands to his bankers (assigned) and if your personal situation goes pear shaped for whatever reason in the 12 to 18 months it takes to build your new suite it is the bank you will be speaking to, not your friendly developer.
I believe the Auckland residential market is in a long term growth phase that will be slightly tempered in the coming two years by interest rate rises and political intrigue.
But the growth will continue relentless and the technical manpower to build for this growth is hopelessly inadequate. There are not the trade skills and personnel to cope with the Christchurch rebuild let alone provide for Auckland’s growth.
So I’m predicting a steady continued growth in Auckland residential real estate (like I’ve never seen it) and gearing in to this market with as little as a 10% deposit ($30,000???) in a rising market might put you in very good stead come settlement time.
I have even resold apartments for profit before the original buyers settle but I’m not promising that.
What are the other risks…..?
Ya have to call.
And click through to enquire about our Sugartree development at Sales@citysales.co.nz
First new build we’ve supported since the Statesman in 2004.
Yes we’re choosy and we want to do right by you.