It’s been a bit of a topsy turvy time for the housing market in recent months. Covid-induced supply chain constraints have had a major impact on the availability of building materials, while mortgage interest rates continue to rise due to wider economic conditions. 

But it’s not all doom and gloom. Despite the challenges facing the market, new builds remain a smart and often cost-effective option for buyers seeking a beautiful new home tailored to their unique needs and lifestyles. 

With everything that’s going on both here in New Zealand and around the world, is now a good time to build a home? Here are a few points to consider: 

Houses are in short supply

Houses are generally in short supply, which means buying an existing property that ticks all the right boxes may be easier said than done. While it’s true that the past 12 months have set records for new home consents, demand still far outweighs supply. For example, in Auckland alone, it’s estimated that another 20,000-30,000 houses are needed to make up the housing deficit. Depending on your circumstances, building a new home can be an effective way to outmanoeuvre housing supply issues. 

Capital gains are cooling

Property price growth has cooled off dramatically over the past few months due to reduced sales activity, increased interest rates and tighter lending criteria. In the three months to May 2022, the average price of property in the Auckland region fell 1.8 percent to an average of $1,473,076, according to figures from CoreLogic.

What does this mean for people who are thinking about building a new home? Well, if property values continue to tumble, it could mean you may have to wait longer to see the massive capital gains that were quite common a couple of years ago. However, if you’re building a new house for you and your family to live in for the foreseeable future, you probably don’t need to be too worried. New Zealand property has historically been extremely resilient and it seems likely that the market will recover in time and house values will rise once again. 

Building material costs are rising

Many building materials have increased significantly in cost over the past 12 months and it’s likely that they could continue to rise further in the months ahead. Prices are being driven by inflation, strong global competition for materials and a huge spike in shipping costs as a result of the pandemic. It’s more important than ever to consider your budget carefully and try to minimise alterations during the building process, which could be more costly than normal. 

Low deposit mortgages for new builds

For many buyers, one of the key barriers to entry to home ownership is the deposit. With banks continuing to tighten their lending criteria, you typically need to have a deposit of at least 20 percent to purchase an existing property. 

New builds have different lending requirements. You typically only need a deposit of 10 percent to build or buy a new home, which can make it significantly easier to get your foot in the door in the current market. Be sure to have a chat with your bank or a mortgage broker for more information. 

New builds meets the latest building standards

Last but not least, one of the key advantages of building – regardless of what’s going on in the wider housing market – is that you can be assured of the quality of your home. When you work with a reputable company like Ikon Homes, you can be confident that the house has been built using quality materials and top-notch craftsmanship, and complies with all the latest building standards. Building a new house is the perfect way to secure a warm, safe, and beautiful home for you and your family. 

Take the next step

Want to learn more about building in the current housing market? Ikon Homes is here to help. Give us a call today on 0800 45 66 50 or fill out our online enquiry form and a member of the team will be in touch with you shortly.