More developers are offering financial sweeteners to prospective buyers of new homes, in the current sluggish real estate market.
Mortgage broker Vijay Gounder said he had seen plenty of incentives for new build properties being offered to his clients.
Simply discounting properties could pull down values for nearby homes in the same subdivision, whereas something like a cashback after purchase would not.
"The subsidy is a great way for them to protect the value of the property, but also give the discount and incentive to the buyer.
"It’s kind of a win-win for both of them."
Mr Gounder said in a soft market, some developers would rather get homes sold than have them sitting empty, especially because easier loan-to-value ratio lending rules defined a new build as no older than six months and bought direct from the developer.
"When it comes up to the six months mark, then you see developers start to, I guess, panic and start offering these crazy incentives to make sure that those properties are sold because obviously they’re holding costs as well."
Fletcher Living last month announced it would offer a $10,000 grant towards deposits for people who buy the company’s homes in Auckland or Canterbury.
It is not alone — developer Jalcon was marketing a subsidy for interest rates for apartments in its Owairaka Collection earlier this year, Avant Group is offering interest rate subsidies or grants for move-in costs for its developments in the Auckland suburbs of Mt Roskill and Wiri, and Ceta Homes is offering a cashback deal for some of its properties.
Ceta Homes director Jason Donnelly said his company had always worked to get first home buyers through the door.
He said the company "might offer a cashback for them. Or we might be able to offer a range of other things, whether that’s trying to partner with other shared equity groups out there, the Housing Foundation or You Own or just even competitive mortgage rates through potentially some better mortgage brokers".
• Katie Fitzgerald received an incentive from the developer when she bought her home.
By Katie Fitzgerald
