Why I’m Betting Big on Off-the-Plan Property in New Zealand
Reflections of an Investor with 5 Years in the Market
Kia ora, I’m Karan Sawhney, and I’ve been investing in NZ property since 2017. I’ve bought, developed, held, sold, and rented. I’ve seen booms, busts, policy shifts, and interest rate roller coasters. Through it all, one strategy has repeatedly stood out for me: buying off-the-plan. If you’re considering property investment, here’s why I believe it’s one of the smartest plays right now, and also why it’s not for the faint of heart.
September 18, 2025
What "Off-the-Plan" Means (Simple Version)
Solid Facts from the Last 10 Years in NZ Property that Back This Up
1. Capital Growth Is Real, Especially for Houses
Between June 2015 and June 2025, the average price for a standalone house in NZ rose by ~56.8% (from about NZ$521,000 to ~NZ$817,000). Apartments rose by ~25.1% in the same period. Mortgage Professional
2. Smaller Towns Have Blown Up
Some of the biggest percentage gains in the past decade haven’t just been in Auckland or Wellington, but in smaller centres. Towns like Kawerau, South Wairarapa, Central Hawkes Bay, etc., have seen asking price increases of 100-200+% over 10 years. Mortgage Professional+1
3. Doubling in Value ≈ Every 8-10 Years for Many Areas
There’s data showing that house prices in many NZ regions are more or less doubling roughly every decade (some even faster). BusinessDesk+1
These reflect long-term trends on why off-the-plan properties are a good choice for investors and buyers.
The Advantages: What's So Good About Off-the-Plan
I’ve experienced these benefits firsthand. Here are what I see as the strong levers:
Price Lock / Potential Equity on Settlement: When you sign off on the plan, you lock in a price now. If the market moves up during construction, you gain instantly. For example, I bought a townhouse off-plan in 2018 with an 18-month build time; by the time it was completed, the market value was ~12% higher. That difference is pure upside.
Smaller Upfront Capital Commitment: Deposit is usually ~10-15%. You don’t need to have all the cash now for the full purchase. That frees up capital to invest elsewhere in the meantime.
Modern Features, Low Maintenance: From day one, new builds tend to come with modern appliances, warranties, up-to-code insulation, and energy efficiency. I’ve had fewer surprise repair bills in new builds than older stock.
Appeal to Tenants / Resale: New, clean finishes + modern layouts + good building compliance = easier to attract quality tenants. Also, when it comes time to sell, off-plan/new build can compete well against older properties needing renovation.
Flexibility & Customisation: Another benefit of buying off-the-plan is that it allows you to get your choice of fixtures and finishes in some cases. However, you must know that these are not always free but can significantly upgrade your purchase.
But Let's Be Real: The Risks I've Learned to Watch Closely
I’m not a blind optimist. Some off-plan purchases have bitten me, or made me nervous. If you ignore these, you could burn.
- Construction delays & developer risk: I once had a project delayed by ~9 months because of supply chain + labour issues. This is why I must tell you that it is important you pick the right developer. For that, you need to check their track-record and use sunset clauses in contracts which allows you to get automatic cancellation and deposit return if project is not completed on time.
- Changing finance/market conditions: Interest rates may rise, and banks may change lending criteria. Some off-plan buyers in 2021-22 found, at settlement, they couldn’t meet servicing criteria.
- Market value risk: If the property market falls between signing and completion, you may end up overpaying relative to what similar properties are selling for. The earlier you buy, the more time there is for something to go wrong.
- Costs + Taxes + Holding Costs: Rates, insurance, maintenance, levies, all may still apply (or increase), and sometimes warranties don’t cover everything. Also, NZ’s tax & regulatory rules (e.g. bright-line test, interest deductibility) may shift, affecting after-tax returns.
Why Now Looks Especially Compelling (in My View)
Putting together the past decade’s lessons & current climate, here’s why I believe this moment is opportunistic.
1. Price Growth Has Slowed (But Not Crashed)
2. Developers are More Cautious, Better Terms Available
3. Developers are More Cautious, Better Terms Available
4. Tenant Preferences Lean New
How I Do It: My Checklist Before I Commit
From my 10 years in, here’s what I look at before signing off-the-plan:
- Developer Reputation — past projects, financial health, customer reviews.
- Clear, Fair Contract Terms — sunset clauses, deposit held in trust, transparent timelines.
- Projected Holding Cost & Worst-Case Scenarios — what happens with high interest rates, delayed construction, and rent shortfall. I run pro form as with conservative assumptions (e.g. longer vacancy, rising costs).
- Location & Infrastructure — proximity to transport, schools, amenities, planned developments. Growth tends to follow infrastructure.
- Exit Strategy — I always think: “If this doesn’t rent well, can I sell or refinance?” I need options.
You can also check out our article on https://kiefer.capital/tips-for-buying-a-new-home-key-things-to-know/
Conclusion: Is Off-the-Plan Right for You?
If you’re an investor with a medium-long-term horizon (5-10 years+), comfortable with some risk, and proactive (you do your due diligence, monitor conditions), off-plan can deliver outsized returns, especially when the market is stabilising, and when small towns/secondary markets are catching up.
If, instead, you want guaranteed cash flows, minimal risk, or are relying heavily on leverage or tight financing, then maybe older stock is more predictable.
Final Thought
Over the past decade, I’ve seen off-the-plan properties transform my portfolio. They’ve given me early equity, better margins, and properties that tenants and buyers love. But I’ve also had my share of sleepless nights. The trick is: buy smart, stay cautious, have backup plans. Do that, and off-the-plan isn’t just a gamble: it’s an opportunity.