Bare land to happy home: Everything you need to know to build in AKL

The Kiwi dream is still alive and kicking and you can still own a beautiful home on a generous section in 2020. But these days, shrinking section sizes and Auckland’s housing shortage often mean that the only option to achieve that dream is buying bare land and building your own new home.

Building from the ground up can be a little daunting – but it doesn’t need to be. To help demystify the process, we’ve run through everything you need to know about each step of building a new property – from bare land to a happy home.

Financing your build

Before you start searching for sections on TradeMe Property, you need to sort out your finances. Get in touch with your preferred lender to get the ball rolling so that you can start the fun bit. Financing a new build will involve:

• Securing conditional pre-approval to give you an idea of how much you can spend. This usually lasts for up to 12 months giving you plenty of time.
• Securing unconditional finance approval for a construction loan and purchasing a section: Your lender may require a valuation to confirm how much the property will be worth when it’s complete before issuing unconditional approval. During the first 12 months or so you may not have to make repayments, or you may only have to make interest repayments. This helps with cash flow during the build.
• Progressively drawing funds from your construction loan in stages to finance the build. This will generally be paid directly to your builder and the bank may inspect the build at each stage to confirm the work is done.
• Once the build is finished, your loan will revert to a regular home loan and you’ll start making repayments.

It’s a good idea to have an absolute minimum of 10% of the total price of the land and build as a deposit, but it’s much better to have 20% or more. Keep in mind you don’t necessarily need this in cash – your deposit could come from equity you have in other properties you own.

Building a new property doesn’t have to be stressful

Choosing a builder and build type

Once you’ve got your pre-approval sorted, it’s time to start thinking seriously about how you’re going to get this thing built. First, decide what kind of build you’re going for:

• Home and land package: The builder supplies the land and build with pre-approved plans or design & build options.
• Build only: you choose the section and the builder handles the rest

Now it’s time to pick a builder. Make sure you go with someone local with plenty of experience building high-quality homes (like us!). Feel free to ask to see some of the builder’s completed homes before committing so that you get an idea of what the finished product might look like.

Buying a section

If you’ve secured a home and land package with a builder like Golstruct Homes, you won’t need to worry about this step. But if you’ve decided to buy your own section, here are a few tips to make sure you choose well:

• Take an expert: feel free to take your home builder or designer along when viewing a section to make sure it’s suitable.
• Check out the details: always have a conveyancer check the LIM and title to ensure you know what you’re buying.
• Know the costs: elevated, sloping and/or remote sections may be beautiful but they can come with extra building costs. Make sure you have an idea of how the cost of the build may be affected before buying a section.
• Look into the future: talk to your council to find out what the plans for the area surrounding your section are. Public links are good – but not so much if there’s going to be a new motorway built just outside your backyard!
• Consider aspect and shape: when you build, you want your living spaces and outdoor area to be north-facing for sun. Consider whether this is possible with the aspect and shape of the section.

If you’re thinking of building a new home and need a hand choosing a section, the team at Golstruct Homes are always happy to help.