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Does a new build's value increase once completed?

A new build house is one of the biggest investments most people make. So, it’s wise to know how your investment will pay off and when. 

Here at Genius Homes, we’ve often had people asking if the equity of a newly built home increases upon completion of the project. In this blog, we share the truth of the matter and discuss how to prepare for your building project accordingly. 

Home construction

House values NZ

Below, we’ve answered some of the most common questions about new build homes and the value they accrue in the New Zealand market. 

What goes up in value faster?

While new builds offer many financial benefits, there is not enough data to claim whether the rate of increase is better for new builds or existing homes. Ultimately, the amount of capital growth you get depends on the property, location, and timing. 

What happens if your property falls in value during construction?

When buying a new build property, there is always a risk that it will drop in value during construction. While it usually increases, there is always a risk that the value will go down. 

In cases where the property value decreases, property investors will be concerned about whether they’ve made the right decision and the financial implications. For example, the bank may not lend you as much money as you initially thought, due to the loan-to-value ratio restrictions (LVRs). 

In these instances, you will need to find money to cover the shortfall. Your options include the following:

  • Using your own home’s equity
  • Using a lender that accepts purchase price as valuation
  • Borrowing with a higher LVR from a bank
  • Borrowing with a higher LVR from a non-bank lender
  • Using other funds
  • Getting a new valuation

Are new builds worth the hype?

If you’re wondering whether to build a new home, you may be wondering if new homes are any better than the existing housing stock. While this depends on your budget, the age of the house, and your priorities, new buildings are usually more rewarding overall. We’ve summarised why new builds are worth the hype below: 

Quality construction

Generally, newly built homes are built to a higher standard than most of New Zealand’s existing housing stock. This is because the building code has evolved over the past few decades and innovative techniques and products have increased. 

In other words, investing in a new home upfront will usually pay off in longevity, durability, and peace of mind. They are also a lot more energy efficient, meaning you’ll save significantly on power bills over the lifetime of the house. 

Additionally, many builders guarantee their work for ten years or more. This means your new home is less likely to have issues as all fixings and fittings are brand new, saving you money on repairs and maintenance. 

Healthy Homes Standards Compliant

New homes are built to automatically comply with the Building Code, including the Healthy Homes Standards. This makes it a lot easier to use the home as a rental property and achieve better returns on your investment. 


A new build home allows you to have everything exactly how you like it. With an existing home, altering the structure and finishes is far more complicated. If you opt for a new build, you can make changes to the standard design and create your dream home as part of the package. After all, this is a long-term investment so it’s worth getting it right. 

Tax Incentives

To increase the number of houses in the country, the Government has introduced various incentives for investors to build new homes. 

In 2021, the Government began phasing out tax deductions on rental property interest costs. However, landlords can claim interest if the rental property is a new build, improving the returns each year. 

The Bright Line Test is another tax system that applies when selling a property. If you sell an existing property within 10 years of purchasing it, you will need to pay the Bright Line interest. However, if the property is a new build, the bright-line test is only 5 years from the date of purchase. Please note that this is subject to governmental change and the information is current at the time of publishing.

LVR exemptions

Investors are currently required to have a 35% deposit under the current LVR lending restrictions in 2023. However, new build homes are exempt from this, requiring only a 10% deposit. 

Extended settlement time

If you build a new house off the plan, you generally only need to pay a 10% deposit upfront. House prices may increase in the meantime but your total cost will be locked in below market value. In a nutshell, that means you pay less and your property is worth more. 

Does a new build home save you money?

While the answer to this question is complicated, the short answer is yes, a new house will save you money. Whilst the initial price may be higher, the lifetime costs are considerably better, as discussed below.


When building a new home, it is much easier to understand what you are getting for your investment. Your building company and contractors can be more transparent about the process and can predict costs more accurately. On the other hand, existing homes are prone to hidden expenses and problems that you’ll need to pay for. 

Maintenance costs

Old homes require far more maintenance over the years while new homes require very little upkeep, at least for the first decade or so. This will save you significantly in materials and labour. 

Construction method

The amount of money you can save on new build homes depends on your chosen construction method. Building a brand new house with an architect or group home builder will cost more because the price is fluid and conditional. However, by building a prefab home, you can reduce the build time and save thousands on labour costs. 

Construction method

Prefab homes are fully built in a factory environment, meaning the prices can be fixed before construction starts. While slight price variations may arise in the groundwork, it’s usually less than a traditional build anyway. This is something that can also be quoted at the time of sale to ensure there are no unforeseen costs. 

The benefits of prefab homes:

  • Fast construction
  • Low travel costs
  • Efficient building techniques
  • Consent and compliance included 
  • Customisable house plans
  • Minimal disruption to your site
  • Minimal material waste

At Genius Homes, we project manage everything for you, including proposals, designs, site work, high-quality materials, consent and building code compliance, construction and sub-trades, project management, internal fit-outs and finishes, delivery, and all the final touch-ups.

Our prefab building process offers all the appeal of a traditional home but with none of the hidden costs or complications that come with building on-site. We strive to design, build, and deliver your home in a stress-free manner so you can enjoy the process. 

Find out more about the prefab approach in our Ultimate Guide to Choosing a Prefab or get in touch with our helpful sales team today.

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