With off-the-plan residential sales tough to come by, Squirrel Mortgages founder John Bolton says the problem is not an over-supply of properties for sale, but developers not building enough of the homes people want to live in.

He says it is easy to blame the problem on high stock levels. While there are pockets of over-supply of commoditised townhouses, many that have been put in the rental pool because developers can’t sell them at the prices the want, that doesn’t explain the reason behind slow off-plan sales.

To help developers understand what investors and home buyers are looking for, Squirrel undertook research through insights agency TRA into what matters for future buyers when looking at new homes.

Initial findings show that 89 per cent of prospective buyers will consider buying a finished new build, 78 per cent an off-the-plan standalone home, and 58 per cent an off-the-plan townhouse. “So, the market is definitely there,” Bolton says.

“But to succeed as a developer quality design and getting their property market fit is critical,” he says.

Bolton says some developers get the importance of building for their market, and as a result, do extremely well.

“On the single-house build, for example, I think developers have nailed it. There are plenty of group builders who are experts at delivering great homes that people love.”

But, he says most of the problems are in the high density space – townhouses and apartments. In Auckland many projects fall woefully short.

“Developers are falling short with a lack of consideration about how people want, and don’t want, to live.”

Using a two-bedroom townhouse as an example, the research shows a good townhouse will need to have wide appeal to young families with one child or downsizers. “Combined that’s a big market."

The key to attracting buyers is that they have to want to live in the house, Bolton says. “With high house prices, it’s not a short-term stepping stone.”

He says these days, there’s a solid chance at least one person in the household works from home regularly.

Assuming both bedrooms are being used as that, does the house have a cubby or some other space for a desk? Does it have a window with a pleasant outlook, or is the work space just tucked away somewhere and the householder is left staring at a wall?

To appeal to older buyers, Bolton says there should be a toilet downstairs so they don’t have to traipse up and down every time they need the bathroom. And if there is a toilet downstairs, is it right next to the lounge where people can hear everything through the walls?

Outdoor spaces are just as important.

“At the most basic level, having a bit of greenery to look out on makes people feel good. It brings in natural light and creates a sense of openness and indoor-outdoor flow,” Bolton says.

“If you’ve got a dog, which about one in three people do, having a patch of grass out the back – even a small one – for them is a non-negotiable.”

Bolton says things like the height of ceilings can also make a huge difference in terms of how prospective buyers experience the home.

“In a small townhouse, going taller than the standard 2.4 metre ceiling height can bring in a whole lot of extra light and make it feel more spacious.

“Building homes that people actually want to buy means developers have to be thinking about all these little details.”

A lack of garage or car park

A few years ago, the government removed minimum on-site car parking requirements for new developments, based on the deeply flawed argument that people are becoming less reliant on cars.

Almost immediately, the market was flooded with townhouses and apartments without car parks or garages.

For developers this is a classic case of “just because you can, doesn’t mean you should”, Bolton says.

“It’s cheaper and it means more units can be crammed onto a site, but who is the target market for a home without a car park?”

He says it’s not a solution for young families, who need a car to get their kids to school and weekend sports. It’s not a solution for professionals who rely on a car to get to work or visit their parents down country. It’s not for buyers looking for a week day bolt-hole in the city so they can avoid long commutes from their main house out-of-town.

“There are few people who don’t need a car.

“So, best case scenario, if a developer skips the parking people end up with streets crammed with cars on grass verges. Worst case scenario – if a developer is building on a main road where on-street parking is at a premium – or non-existent – they have just wiped out a huge part of their potential market altogether.

“Some investors might not care about a lack of car parking if all they’re worried about is rental yield. But the savvy ones will be thinking ahead to what happens when they go to sell the property in 5-10 years’ time.” Who will the resale market be?

A lack of storage

Developments with no parking, or even with outdoor parking/carports, often have issues with a lack of practical storage.

“Beyond just being a place to park a car, many people think of a garage as an extension of the home. It’s a place where they can set up a home gym, store extra stuff, or hang laundry out to dry on rainy days,” Bolton says.

“Where does all that extra stuff go if there isn’t a garage? Is there an extra bedroom for the overflow? Are there plenty of cupboards? Ceiling storage? Or a covered outdoor space where people can park their wet bikes?

A lack of privacy

Privacy—and more specifically inadequate soundproofing—is one of the biggest objections to high density living.

Bolton says just because someone’s okay sharing a wall with their neighbours doesn’t mean they want to be able to hear their every movement (or vice versa).

Gib inter-tenancy walls are usually the preferred option for developers, simply because they’re cheaper. But while concrete inter-tenancy systems might cost more, the added benefits – ie, next to no noise transfer and significantly improved fire safety protection – are well worth thinking about if a developers wants their project to stand out to potential buyers.

“Then, doing what they can to limit noise transfer in outdoor spaces is also just as important. What happens when everyone’s got their ranch slider open on a hot summer day?”

He says developers need to think about how to prevent noise transfer between neighbouring properties?

“A recessed porch can make a big difference to the acoustics when it comes to indoor-outdoor flow, but it’s not something we see in a lot of in developments.”

The moral of the story?

Way too often, it feels like the name of the game is simply to build everything as cheaply and quickly as possible and cram as many units as possible onto a site. “If that’s the case, developers are headed for trouble,” Bolton says.

“Being cost conscious is important – obviously – but good design doesn’t have to cost the earth.

“More importantly, how do developers get it right?”

He says many Kiwi developers, particularly townhouse developers, could learn from Johnny Ive.

The man – best known for his 20 plus year stint as Apple’s chief design officer – basically wrote the playbook on the importance of intentional, functional, human-centred design when it comes to selling product.

His philosophy is best summed up in this quote:

“We’re surrounded by anonymous, poorly made objects. It’s tempting to think it’s because the people who use them don’t care – just like the people who make them. But what we’ve shown is that people do care. It’s not just about aesthetics. They care about things that are thoughtfully conceived and well-made ... our success [at Apple] is a victory for purity, integrity – for giving a damn.”