New Builds

7 min read18 Jun 2025

New builds: What are the pros and cons?

Thinking about investing in a New Build? Discover the pros and cons of new-build properties, including tax benefits, deposit requirements, and whether they suit your investment strategy.

Author: Stevie Waring

Financial Adviser with 7 years of experience, and an investor in Wellington and Christchurch

Reviewed by: Ed McKnight

Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.

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New Builds can be a good investment; they’re low-maintenance and you don’t need as much deposit.

But they’re not the right fit for everyone.

They usually work best for investors who want a build-and-hold strategy rather than someone who’s interested in renovating.

So, is a New Build the right choice for you?

Just before we get into it, here at Opes Partners we help investors buy New Builds, so I have an incentive to say, “New Builds are great. Everyone should buy one!”

I’m not going to say that. Instead, my approach is simple: I’ll lay out the pros and cons of buying a New Build as honestly and as unbiased as possible.

Then I’ll take a step back so you can make the right decision on what investment suits you best.

Pros ✅	Cons ❌
Lower deposit required – easier entry point for investors Requires less time and effort – ideal for hands-off investors No renovation costs Lower maintenance – everything’s new and often under warranty Exempt from DTI restrictions – can help you grow your portfolio faster	You can’t renovate to add value Relies on market growth and capital gains Not as many New Builds for sale compared with existing properties Typically more expensive than existing properties May involve ongoing costs like body corporate or residents’ fees

Pros ✅

Cons ❌

Lower deposit required – easier entry point for investors

Requires less time and effort – ideal for hands-off investors

No renovation costs

Lower maintenance – everything’s new and often under warranty

Exempt from DTI restrictions – can help you grow your portfolio faster

You can’t renovate to add value

Relies on market growth and capital gains

Not as many New Builds for sale compared with existing properties

Typically more expensive than existing properties

May involve ongoing costs like body corporate or residents’ fees

The 5 pros to investing in a New Build?

There are 5 main pros to investing in a New Build.

#1 – Investing in New Builds requires less time

New Builds are great for people who are “time poor”.

If you’re a working professional with young children you might not have the time (or desire) to wield a paintbrush on your weekend. Swinging a hammer to renovate an existing property might not be high on your to-do list.

New Builds don’t need to be renovated; the property is a finished product.

That also means they don’t need as much maintenance, so the property doesn’t need as much of your time.

More from Opes:

#2 – Lower money (deposit) needed to get started

New Builds have special rules. You don’t need as much deposit to buy one.

Buyer Type	Property Type	Deposit	LVR (Loan)
Owner-Occupier	Existing	20%	80%
Owner-Occupier	New Build	20%	80%
Investor	Existing	30%	70%
Investor	New Build	20%	80%

That’s because they are exempt from the Loan-To-Value Ratio (LVR) restrictions.

So you only need a 20% deposit to buy a New Build, compared with 30% for an existing property.

Let’s say you want to buy a property for $600,000. You’d need a $120,000 deposit if it’s a New Build, whereas you’d need a $180,000 deposit for the equivalent existing home.

The big benefit of using a lower deposit is if you put less money in, then any capital growth you get gives a better return on the equity invested.

For instance, if you buy a $600,000 property and it rises in value by 10%, then the property is now worth $660,000 and you made $60,000.

If the property was a New Build, then that is a 50% return on your $120k deposit.

Or if it was an existing property, then you received a 33% return on your $180k deposit.

#3 – No renovation costs

Even if you can stomach the higher deposit for an existing property ... you still need to pay for renovations.

Take the example of a $600,000 existing property that needs a $180,000 (30%) deposit. You might then need to spend $40,000 renovating the property.

The bank won’t lend you this money against your investment property (unless you put in an even bigger deposit), so you either need the $40,000 in cash, or you’ll need to borrow it against another property.

Some investors don’t have the equity or cash available. This is why people who are light on equity may opt to invest in New Builds.

#4 – Lower maintenance costs and warranties

A New Build is, as it says in the title, new. So they don’t need much maintenance.

Most investors will budget about $2000 a year for maintenance on older properties.

But often $500 is more than enough per year for New Builds, so your maintenance budget could be $1500 less per year.

Then, you often have warranties on all the appliances. This also helps to keep maintenance costs low.

#5 – New Build property investors don’t have to follow DTI

New Builds are exempt from the debt-to-income ratios that came in on July 1, 2024.

DTIs link your income and how much you can borrow.

This means you might not be able to borrow as much money to invest or buy a property.

Here are the new rules set by the Reserve Bank:

6x your income for an owner-occupier and
7x your income for a property investor.

But if you don’t have to follow those rules … you might be able to grow your portfolio faster. So some investors are buying New Builds because it can be easier to get money from the bank.

What are the cons of buying a New Build?

So, you might be thinking: “Wow, I’m convinced – sign me up for this DTI-free, low-deposit haven of property investing!”

But hold up.

Before you race off to put a deposit down on the next off-the-plan townhouse, it’s important to look at the flip side. Because while New Builds come with serious perks, they’re not the right fit for everyone. They have downsides too.

And there is a chance that New Builds might not be right for you.

Let’s walk through the downsides – so you can make a smart, balanced decision.

#1 – You can’t renovate to build value

One of the biggest upsides of existing properties is that you can roll up your sleeves and add value. You can add a fresh kitchen here, a bathroom reno there.

That increases the value and the rent on your property.

With New Builds that option’s off the table. You’re buying a finished product – no renos needed. So if you’re the type of investor who’s handy with a hammer or keen on sweat equity, New Builds might be too restrictive for you.

#2 – You’re more reliant on the market going up

Most property investors want property prices to go up over time. That’s often how you make the most money investing in real estate.

But with New Builds, it’s even more your main move.

With an older property you can bump up the value yourself through renovations. That creates equity you can borrow against for your next investment.

As I say, you can’t do that with a New Build, so you are more reliant on the cashflow and property prices going up over time.

That’s fine if you’re planning to go slow and steady, but some investors don’t like the idea of relying on the market going up in value. And if that’s you, perhaps an existing property might be a better fit.

#3 – There are fewer New Builds to choose from

If you’re property shopping right now, you’ve got around 40,000 listings to scroll through on Trade Me.

But only around 5,000 of those are New Builds. That’s just one-eighth of the market.

So while New Builds can be attractive, there are fewer options compared with existing properties.

This can make it trickier to find the right property in the right area, especially if you’re picky on location or design.

#4 – Higher price (even if the deposit’s lower)

While one of the big upsides of New Builds is the lower deposits … the property’s price-tag is often higher.

In fact, New Builds typically cost more than comparable existing properties.

Why? Because everything’s new. It’s up to modern building standards. It hasn’t suffered years of wear and tear, and often includes nicer finishes.

So while the deposit might be lower, the total purchase price is usually higher than a 1960s do-up down the road.

#5 – Ongoing costs: Body Corporates and Residents’ Associations

Many New Builds come in clusters; think a row of townhouses or an apartment. This means you’ll often need to join a Body Corporate or Residents’ Association.

These groups manage shared spaces and maintenance (like driveways, gardens, or the exterior of the property) but they also come with ongoing costs.

Some investors would prefer to steer clear of these. Instead, they like the control of buying a standalone house.

Of course, not every New Build comes with a body corp or residents’ association, but many do.

What’s right for me? Do the pros outweigh the cons?

The truth is that New Builds are right for some investors, but aren’t right for others.

It all comes down to your strategy and how you want to make money from property.

If you’re looking for a hands-off, low-maintenance investment and you’re happy to play the long game ... then New Builds can be a smart, future-proof choice.

They’re easier to get into (thanks to lower deposits), tend to attract quality tenants, and come with fewer surprise costs.

But if you want to renovate and are handy with a hammer … then existing properties will better suit your style.

Choose the one that best fits your goals and how you want to invest.

Stevie Waring

Financial Adviser with 7 years of experience, and an investor in Wellington and Christchurch

Stevie Waring is a Financial Adviser with over 7 years of experience in property investment and a successful investor herself. Stevie has successfully guided over 200 Kiwis in their property investments, helping them move closer to achieving their financial goals.

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