‘There are a lot of rookie developers out there and it’s a concern’

The director of Auckland’s biggest real estate agency has urged new home buyers to get a building report done before they settle.

Kiri Barfoot, director of Barfoot and Thompson, says the sharp rise increase in building work around the city has heightened the risk that some new-builds won’t be up to scratch, and she advises buyers to research developers before signing up to buy off the plan.

“There are a lot of rookie developers out there and it’s a bit of a concern. People have no idea how to buy a new build and how to ask the right questions. [Buyers] just look at the glossy brochure or think everything’s going to be OK,” she told OneRoof.

Buyers needed to do their homework and to check the quality of the build, Barfoot said. “Just because it’s a new build doesn’t mean it’s perfect. Before you settle you can get someone to come around a have a look.”

Property lawyer Sarah Manning, of Mortlock McCormack Law, said that while the cost of building inspections was tough on those with limited budgets, buyers opened themselves up to risk if they didn’t do their due diligence.

“We always make every single purchaser get a building report, even for new builds,” she said, adding that she had seen building reports that highlighted defects in new homes that had been signed off by the council.

She said that while buyers can’t get a building report at the time of buying off the plan, “they can still get it done before they settle. That is provided that the terms and conditions in the contract (allow buyers) to take money off if it’s wrong. Or make the developer fix it.”

Barfoot and Thompson director Kiri Barfoot: “People have no idea how to buy a new build and how to ask the right questions.” Photo / Fiona Goodall

Manning said that in many cases vendors don’t give buyers much room to negotiate terms for the purchase. “What the vendor will say is, ‘There are 60 other people that want this, so I’m not agreeing to that.’”

Last month OneRoof reported that “cowboy” developers and builders were cutting corners in Auckland. It’s something that Rob Brook, general manager of BuildQual NZ, sees when his inspectors carry out pre-purchase house checks. The majority of problems BuildQual’s inspectors find are with existing homes, says Brook, but some new homes have a long list of issues.

“People go into homes with their rose tinted glasses on. They fall in love. Then our guys go in from a technical perspective and they go: ‘oh hold on, that’s not quite right’.”

Brook said the majority of the issues inspectors find with new homes tend to be aesthetic, not structural, but they do find more serious issues from time to time.

He quoted an example of a $2m home in Merivale, Christchurch. At that price the buyer expected the build to be perfect and when BuildQual produced its report, the builder had to fix a number of issues. “[The buyer] said, ‘Can you send the report to the real estate agent and tell them to get the vendor to fix them? I'm paying $2 million for this house, and I expect it to be tip top.’”

Auckland is experiencing a boom new home construction. Photo / Fiona Goodall

In another example the BuildQual inspector found the overflow from the sink hadn’t been connected on a new build. “So, the very first time somebody filled the kitchen sink it was going to pour into the cabinetry. That’s something councils are supposed to tick off,” Brook said.

A common issue inspectors come across with new homes was height difference between the finished floor level and the garden and paths around, Brook said. Often the floor level was signed off by council before the landscaping is done. “The surrounding ground are so high that if there is a flood there's not that separation between the finished floor level and the surrounding ground.”

In many cases where new builds have issues, the developers will fix the problem, Brook said, but some don’t. One recent new build he had seen had a long list of aesthetic and structural issues and the builder wasn’t interested in fixing them. “The builder basically said, ‘Well, we've got council sign-off, go whistle’.”

Fletcher Building’s chief executive Steve Evans agrees that building reports give peace of mind. “We've actually advocated for this for a long time.” At the same time buyers do get a degree of assurance that new homes do need to make building code and get Code Compliance Certificates, he says.

On the other hand the council inspectors who sign off on new builds can’t be standing over builders every minute of the day.

Councillor Chris Darby, chair of Auckland Council’s planning committee, is well aware that products specified by architects in the plans are sometimes compromised, or the methodology compromised.

“It really does concern me that we have [a] rampant construction period where council officers cannot stand there watch the house being built. We cannot do that. But ultimately, we're responsible,” he said.

“[Building control officers] are just so stretched. It's not just, it's just not the building issues it's the compliance issues like silt control. There's a whole raft of issues. That's what you get when you've got these record consents, but they come with problems attached.”

Darby points out that there are some very capable developers creating some great housing choices. He cites the example of NZ Living, which has completed good quality affordable apartment developments in master planned communities at Northcote, Pt England, Onehunga and Otahuhu.