When the gamble pays off: What to look for when buying in a new suburb

Buying a home in a newly developed neighbourhood can be a winner. It’s also a gamble.

On the upside, you can get your foot in the door with a lower deposit and may bag a bargain if you’re willing to buy off the plan before the home is built. The community will grow with you.

READ MORE: Find out if your suburb is rising or falling

The gamble is that your home may never be built, may not have the amenities you need, and you may not like the community when you move in.

With the right research your risk can pay dividends. If all goes well, you’ll make good capital gain, and the neighbourhood will prove to be all you dreamed of.

But what differentiates a Silverdale/Millwater from Hobsonville, West Habour, Pokeno or many other new developments popping up on greenfield and brownfield sites in Auckland? Some will be a cut above. The playgrounds of Hobsonville, for example, have won awards, whereas so far that’s not the case at Pokeno. At least so far.

It’s a tossup, however. You’ll pay more for a better area. Universal Homes new home consultant Maryanne Bawden cites a recent example of a client comparing Hobsonville Point, in Auckland's west, with nearby West Hills near Westgate. One member of the couple preferred to forego an extra toilet and bedroom to get into Hobsonville, and the other wanted the larger house for the same money at West Hills.

Every new suburb has space set aside for schools, supermarkets, pharmacies, parks, day care centres, doctors’ surgeries, libraries, and more. The larger the development the more you’ll get.

Beware, however, if the amenities haven’t yet been built. Bill McKay, senior lecturer at the University of Auckland’s School of Architecture and Planning, says promised amenities sometimes don’t eventuate, and that buyers should always check for existing and proposed public transport and road links.

They should also determine whether or not the new neighbourhood will be a dormitory suburb, with residents decamping elsewhere during the day. The advantage that established communities have over newly developed neighbourhoods is that they tend to be lively throughout the day.

Suburbs such as Stonefields, Hobsonville Point, Silverdale and Millwater are still being developed, but have been around a decade or more, and have built a reputation.

Hobsonville Point, for example, is well liked for its community, its schools and environment, which draws buyers in.

Buying already built new homes in a new suburb is also less risky than buying off the plan, says McKay.

If you buy off the plan you will pay a deposit, but your home may never be built thanks to “sunset clauses” in the contracts, says McKay. These clauses can be used to cancel developments.

The quality of building can vary, although your risk is reduced thanks to standards set by the Building Code. But do ask yourself if the developer has been around 10, 20, 30 or more years?

Before signing on the dotted line get your lawyer to check the title, says McKay. “Increasingly there are covenants in (new) neighbourhoods, which limit what you can build, plant trees, paint, add an extra unit and so on.”

Covenants can be a blessing because they ensure certain standards are kept, but a curse if you want to do something out of the ordinary with your property.

Also beware of easements, says McKay. “You might think you can add a big deck out the back, but there might be an easement for drainage, which (means) you can’t.”

Check where the property lies in terms of flood plains and drainage, he adds. “You go [house-hunting] in summer, but you’re not thinking about it pelting down in winter and all the water running off the neighbour’s concrete.”

Another issue is that views are not protected under New Zealand law, he says.

Bawden says that a generation ago buyers normally had to rely on what the salespeople told them about a proposed development, but these days they can do a lot of deep research themselves.

“You’ve got Facebook community pages. [Buyers] can hop on that and get a feel for what sort of people live in the area, what the likes are, what the complaints are.”

Make sure you visit at different times of the day and week to check how the neighbourhood is functioning, adds McKay. Noise and traffic may be problematic at different times of the day/week. These are the two things people always moan about.

Finally, consider what you’ll need as your children grow up and you age, says McKay.

- This content was created in partnership with Kāinga Ora