Buying Existing Property vs Buying Off the Plan
Buying an existing property lets you inspect what you are getting before you commit. Buying off the plan means purchasing a new-build before it is constructed, with risks around delays, material changes, and developer solvency — but also the potential for a brand-new home at a locked-in price.
Side-by-Side Comparison
| Attribute | Buying Existing Property | Buying Off the Plan |
|---|---|---|
| What you inspect | The actual property — walk through before you buy | Plans, renders, and show homes — the building does not exist yet |
| Due diligence focus | Building condition, LIM, title, consents | Developer track record, contract terms, sunset clause, specifications |
| Deposit | Typically 5-10%, held by stakeholder until settlement | Typically 10%, held by stakeholder (developer cannot access it) |
| Settlement timing | Usually 4-12 weeks after agreement goes unconditional | Months or years away — when construction is completed |
| Price certainty | Fixed at time of agreement | Fixed at time of agreement, but market may move in either direction |
| Sunset clause | Not applicable | Developer can cancel if not completed by sunset date |
| Building warranties | None (unless recent build with existing warranty) | Typically includes builder's warranty and may have 10-year guarantee |
| Material changes | Not applicable — you see what you get | Developer may substitute materials or make design changes |
Buying Existing Property Explained
Buying an existing property is the traditional approach. You visit the property, assess its condition, and know exactly what you are getting before you sign. Your due diligence covers the building's physical condition (via a building report), council records (via a LIM report), legal title, and any registered interests like easements or covenants.
The main advantage is certainty — you can touch, see, and test the property. The downside is that older properties may have maintenance issues, weathertightness problems, or unconsented work that needs to be investigated.
Finance is also more straightforward. Banks can value an existing property immediately, making the lending process predictable and faster.
Buying Off the Plan Explained
Buying off the plan means entering into an agreement to purchase a property that has not yet been built. You are buying based on architectural plans, specifications, and the developer's promises. In New Zealand, your 10% deposit is typically held by a stakeholder (usually a law firm's trust account) and cannot be used by the developer during construction.
The key risks include sunset clauses (which allow the developer to cancel the contract if construction is not completed by a certain date), material or specification changes during construction, and the possibility that the developer becomes insolvent. Your lawyer should carefully review the agreement, particularly the sunset clause, the specifications schedule, and the developer's obligations regarding changes.
The benefits include getting a brand-new home with modern building standards, a builder's warranty, and potentially locking in today's price in a rising market. However, if the market falls between agreement and settlement, you may end up paying more than the property is worth at completion.
Do You Need Both?
This is not a both-or-neither choice — it depends on what is available and what suits your circumstances. Off-the-plan purchases suit buyers who want new construction and are comfortable with a longer timeline and some uncertainty. Existing properties suit buyers who want certainty and a faster settlement.
Which Should You Get First?
If you are considering off-the-plan, engage a property lawyer with development contract experience before signing anything. The standard ADLS agreement is heavily modified in off-the-plan contracts, and the terms need careful review. For existing properties, standard due diligence applies — building report, LIM, title search, and lawyer review.
Frequently Asked Questions
Is my deposit safe when buying off the plan?
In New Zealand, the 10% deposit should be held by an independent stakeholder (usually a solicitor's trust account) and not released to the developer until settlement. Verify this is the case in your agreement — if the developer wants direct access to your deposit, treat this as a serious red flag.
What happens if the developer goes bankrupt?
If the developer becomes insolvent, your deposit should be protected if it is held by an independent stakeholder. However, you will lose the property and any price advantage you had locked in. You may also face delays recovering your deposit through the liquidation process.
Can the developer change the specifications after I sign?
Many off-the-plan contracts include clauses allowing the developer to substitute materials or make minor design changes. Your lawyer should negotiate limits on these changes and ensure you have the right to cancel if material changes are made that substantially affect the property.
Related Terms
Building Consent
GlossaryOfficial council approval required before you can carry out most building work in New Zealand.
Code Compliance Certificate (CCC)
GlossaryAn official council certificate confirming that completed building work meets the requirements of the building consent and the Building Code.
Deposit
GlossaryAn upfront payment made by the buyer when purchasing a property, typically 20% of the purchase price, held in trust until settlement.
Settlement
GlossaryThe day ownership of a property officially transfers from the seller to the buyer and the purchase price is paid in full.
Private Sale vs Auction
ComparePrivate sale (treaty/negotiation) lets you include conditions like finance and building inspection to protect yourself. Auction requires you to bid unconditionally — once the hammer falls, the deal is binding with no way out.
Residential Due Diligence vs Commercial Due Diligence
CompareResidential due diligence focuses on building condition, title, and council records. Commercial due diligence adds layers of complexity — zoning and permitted use verification, lease agreements, seismic assessment, environmental contamination, and commercial body corporate obligations.
Conditional Offer vs Unconditional Offer
CompareA conditional offer includes clauses that let you cancel if certain checks fail — like finance, building report, or LIM. An unconditional offer has no conditions and is immediately binding. Conditions protect you; going unconditional means accepting all risks.
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