New-build buyer risks grow

High demand, a lack of building materials, rising costs, and a Covid-19 related labour shortage have led to severe delays in completing new build construction across the country, and developers have begun to push back timelines for completion on new homes.

According to advisers, many developers are offering new homes on two year timelines, with sunset clauses of between 18-24 months commonplace across New Zealand.

With build completions pushed further out, advisers have warned that borrowers are taking on greater risks by signing up for a new home.

Hamish Patel of Mortgages Online said clients had begun to buy homes off-plan on two year timelines, with developers only willing to agree 18 month to two year sunset clauses in many cases.