New Builds or Existing Properties: What’s the Smarter Investment?

With new investment rules in place, there is only one way investors should be looking when tossing up between new builds or existing properties.

At some point in every investor’s journey, one key decision comes up: Should I buy a new build or existing properties?

Old-school wisdom tends to favour existing properties - the thinking goes, “more land equals more capital gains.” But in today’s market? That mindset is costing investors real money.

Let’s cut through the noise and lay out exactly why new builds are dominating the investment landscape - and why existing homes might just be holding you back.

The Old Argument: Existing Homes = More Land = More Value

Sure, existing homes often come with a bigger backyard. But the truth is that capital growth isn’t tied to lawn size anymore.

The only property type that consistently underperforms long-term capital growth is apartments, not new builds. Standalone houses and townhouses (including brand-new ones) are performing just fine.

So the real question becomes: what’s the better vehicle for wealth-building?

The Game-Changers: Two Government Incentives Tipping the Scales Toward New Builds

1. Interest Deductibility
   

2. Lower Deposit Requirements
   

Let’s unpack these, because they significantly impact your bottom line.

1. Interest Deductibility = Better Tax Efficiency

This one’s a biggie.

New builds retain full interest deductibility, meaning you can deduct mortgage interest costs when calculating your taxable rental income.

• Lower taxable income
  

• Smaller tax bills
  

• Better cash flow
  

Compare that to existing properties, where interest deductibility is being phased out under current tax rules. That means higher taxable income and more tax.

Translation? Existing homes just became a lot more expensive to hold.

2. Lower Deposit Requirements = Greater Leverage

Investors buying new builds only need a 20% deposit. Existing homes? 30%.

Let’s say you’re eyeing a $650,000 property; this is the deposit you'd need:

• New build = $130,000 deposit
  

• Existing = $195,000 deposit
  

That’s a $65,000 difference, capital that could go toward another investment, renovations, or staying liquid.

In short, new builds let you do more with less.

Hidden Bonus: Lower Ongoing Costs

New builds aren’t just about incentives; they’re also smarter to own.

• Built to Healthy Homes standards
  

• 10-year builder warranties
  

• Minimal maintenance required
  

Compare that to older homes: leaky roofs, dodgy wiring, retrofitting insulation, and surprise repairs that eat your returns. One roof repair could set you back upwards of $20k, which hampers your cashflow for a decade.

So, Which Should You Choose?

Unless you’re a full-time flipper or renovating specialist, new builds are the better move for most investors.

Why?

• Better cash flow
  

• Lower deposits
  

• Tax efficiency
  

• Lower upkeep
  

• Strong capital gains (non-apartment stock)
  

The numbers, the policies, and the real-world experience all point in one direction.

Final Word: It’s Time to Ditch the “Old is Better” Mentality

The property game has changed, and savvy investors are adapting. New builds aren’t just easier to own, they’re more scalable, less risky, and designed for modern investing.

If you’re not sure where to start or what fits your strategy, our expert advisors are here to help. We’ll walk you through your options and help you make your next smart move.

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How Can We Help You?

We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.

What Does This Look Like?

We use a 3-step process:

1. We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.

2. This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.

3. Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.

Who Are We Right For?

We help people make smart investment choices and set up their futures. From first-time investors to experienced investors, we can cater to a wide range of people and help set up their futures through research-based property investment.

How Much Does It Cost?

Our advice is free to you! If you choose to invest, we’re paid by the property developer. This developer-paid model allows us to provide no-obligation property investment advice in New Zealand, without charging clients directly.

What Do We Do, And What Don't We Do?

What We Do

We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out.What We Don’t Do

We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.

How Do I Start?