What is making development pre-sales so hard to come by these days isn’t an issue of oversupply but a mismatch between many of the homes being built and what buyers want, says John Bolton, founder of Squirrel.
He says the golden rule for developers and the success of any project – more so than ever – is knowing the market.
“That’s why Squirrel has commissioned new research from insights agency TRA to help unlock the answers about exactly what future homebuyers are looking for – off-plan versus existing, priorities, concerns, non-negotiables – and what developers need to keep in mind,” says Bolton.
“The off-plan market opportunity is significant, if you know who you’re building for. The fact remains that many Kiwi buyers still like the idea of being able to see, and touch, a property before they buy with 94% of future buyers saying they would consider purchasing an existing home, and 89% a finished new build.”
When it comes to buying off-plan, the survey found that 78% of future homebuyers said they were considering buying an off-plan standalone home, and 58% were considering an off-plan townhouse.
Those in their 30s were significantly more likely to consider either option, coming in at 87% and 68% respectively. Future homebuyers aged 50-plus were much less open to the idea at 67% for off-plan standalone and 47% for off-plan townhouses.
“In short, it still feels too risky,” says Bolton.
The main concerns future homebuyers had surrounded the financial risk of committing to a property before it’s built (56%), potential timing delays (44%), and a lack of familiarity with the process of buying off-plan (38%).
“There’s a real opportunity for the market and for savvy developers, as part of their sales and marketing, to educate buyers around the process, and the steps being taken as part of the build to address these concerns.”
The full survey findings will be released at BuildNZ Squirrel Seminar Series on July 16.
Sponsored content: For more information phone 0800 21 22 30 or visit www.squirrel.co.nz.