In a nutshell:
- Many have blamed oversupply for New Zealand’s slow off-plan sales environment of the last few years, but new research from Squirrel shows the problem goes much deeper.
- In short, buyers just aren’t loving their off-plan options—turned off by a ‘sea of sameness’, and homes which don’t meet their emotional and functional needs.
- The good news though, is that there are a number of incremental steps that developers can take to overcome this challenge—including short, medium and large changes focused on better tailoring their marketing and design to suit buyers identity and needs.
It’s no secret that New Zealand’s off-plan market has had a tough run of late.
While many will quickly blame sluggish sales on oversupply, Squirrel’s new research into exactly what Kiwi buyers want from their homes shows the problem runs much deeper.
Better Builds for Buyers: Homes, not units study (conducted with TRA) found that while 82% of future buyers are open to buying off-plan, only 32% would seriously consider it.
And the main thing turning buyers off? To put it bluntly, they’re just not loving their options.
The good news, though, is that developers can make plenty of incremental changes to help shift the dial and overcome a slow off-plan sales environment. Let’s take a look.
Phase 1: Small shifts
Talking to the emotional benefits, not just the build specs
Anyone who’s ever bought a house the old-fashioned way (after traipsing through dozens of other open homes that didn’t quite fit the bill) can probably tell you how they “just knew” when they eventually found “the One”.
It’s that feeling you get when you walk into a space, and something about it makes you instantly fall in love with the idea of living there.
Once a home has ticked all the right boxes from a practical standpoint, it’s this emotional connection (or lack thereof) which really makes or breaks a sale—and according to our research, it’s one of the biggest areas where off-plan options are falling flat.
So how can developers help to foster that same emotional connection, without an open home to do the talking? It starts with your marketing.
Little changes developers can make include:
- Use human-centred language—less “double vanity ensuite”, more “easy morning routines”; less “double-glazed windows”, more “peaceful spaces that stay cool in summer and warm in winter”. The goal is to sell the emotional benefit—the lifestyle—rather than the build specs.
- Showcase the third room as a multi-purpose space—it could be a bedroom… a gym… a home office…or a craft room. Use renders to showcase different ways of using the space.
- Highlight must-haves—adequate light, storage, privacy, and outdoor space are all top considerations for Kiwi buyers. Highlight how you’ve delivered on them as part of your design—do it early and do it often.
- Tailor your marketing to different segments—have different info packs ready to go depending on who you’re talking to, whether it’s young families, young professionals, or retirees.
Phase 2: Medium shifts
Getting the balance right between thoughtful design and value for money
Zooming out a little, the next phase is about ensuring you’re equipped to deliver on the buyer’s individual wants and needs.
People accept that townhouse living involves a degree of compromise—greater affordability means making trade-offs on things like size, proximity to neighbours, and outdoor space (for example).
But that doesn’t mean they’ll tolerate bad design.
While a cookie-cutter approach is great for keeping build costs down, our research shows that the resulting ‘sea of sameness’ is a major turn-off for prospective buyers when purchasing off-plan, making it tough for them to see themselves in a home.
At the end of the day, if buyers can sense that a property has been built as cheaply as possible (at the expense of functionality, individuality and overall livability), they’re going to walk away.
Striking the right balance—homes that are both thoughtfully-designed and customisable, while still representing good value-for-money—is critical for any developer wanting to succeed in the current environment.
So, what does that look like?
- Offer modular upgrades—this gives buyers the ability to customise a home to better suit their needs, such as through options to include a built-in desk for working from home and extra storage add-ons.
- Design third rooms for greater flexibility across life stages—include wiring set-ups, layout flexibility, and acoustic treatments that allow buyers to adapt the space as their needs evolve over the years.
- Showcase downstairs storage as extra lifestyle space—incorporate bike storage, sports gear and home workshop set-ups into renders and sales copy.
- Reduce ‘sameness’ in design—include different exterior cladding types / facades within the same development, give buyers the choice of including accent walls.
- Inject moments of delight—include thoughtful finishing touches such as reading nooks, courtyards or semi-private front yards in your design.
Phase 3: Large shifts
Redefining your project vision & buyer strategy
The final phase is about taking a step back and looking at the big picture—your overarching strategy and approach. And there are a couple of different parts to that.
The first is to do with buyer strategy.
If the research findings have made one thing crystal clear, it’s that when it comes to off-plan design, average satisfies no one. That means getting your product-market fit right, across all stages of the process, is absolutely critical.
- Clearly define your target market—get clear on who you’re building for before you get underway—whether it’s young professionals, downsizers, multi-generational families, or a mix of segments—and approach every aspect of the design with them in mind.
- Incorporate variation into every project—offer a mix of different layouts even within single developments, to achieve broader appeal across various market segments.
- Rethink presale and buyer staging strategy—target identity-driven buyers early on in your marketing process, then cast a wider net at launch.
Last but not least, it’s about ensuring you’ve got the right partners along the way.
- Integrate co-located design or delivery partners—bringing build partners on board earlier to help limit redesign costs.
- Explore alternative, builder-led financing options—to help reduce reliance on pre-sales and get projects underway easier, and faster.
Squirrel’s team of development lending experts know the market like the back of our hand. If you’re looking for the right funding solution to help you get your next project off the ground and unlock the off-plan market, book a chat today.