Free rent is 'a bit of a carrot'

Highmark Homes Ltd has kicked off a promotional campaign offering free rent for up to 16 weeks, says its general manager Ryan Hunt. Photo / Ruth Keber

Building companies are offering big incentives to prospective buyers as competition heats up - including paying their rent.

Others are offering Fly Buys, deals based on square metre rates or new heat pumps. But industry leaders say customers are not always swayed by the ploy as ultimately they pay for it and businesses were usually judged on their reputation.

Highmark Homes Ltd is offering to cover the cost of $400 rent a week for up to four months from the date of your first draw down payment on the build.

General manager Ryan Hunt said it was concerned some people did not have a large deposit and it wanted to help them secure funding for their project. The cost of outgoings while the build was under way could also be a hurdle, he said.

"From time to time over the years we have run different incentive packages, but nothing as good as this as we are able to assist people into their new home, stress free."

The campaign had kicked off on Facebook but it was too early to calculate its success, he said.

"With our new website only weeks away that will allow us to gauge market interest as the campaign gains momentum."

Tauranga Generation Homes managing director Lyndon Marshall said it tended to offer incentives on a case-by-case basis.

It may throw in a free heat pump for nothing that was not added onto the price of the build or look at paying rent. In the past it had moved people from their rental into their home "as a bit of a carrot".

Any promotion had to be added onto margins, he said.

"Generally everyone is not going to give away something out of their margin for free."

Jennian Homes Bay of Plenty office manager Mark Affleck said it had been offering Fly Buy points for years.

"We are not doing anything else because if it's a big ticket item it's got to be paid for somehow.

"So we aim for something that is reasonable in order to wear the cost. I guess the trick is you don't want to price yourself out of the market."

Companies either took the hit themselves or factored it into the build, he said.

"We all operate on tight margins and no-one is making huge percentage profits so you have to get the balance right."

Mr Affleck said he did not think promotions were a driving force behind people's decision.

Classic Builders director Peter Cooney said the building industry had "always been very competitive" and often the bigger incentives related to a brand requiring more work at certain times of the year.

But the consumer should always base their final decision on quality and the track record of a company, he said.

The deals
• Rent Free Summer, with Highmark Homes, will pay rent for up to 16 weeks.
• Fly Buys up to 8000 points with Jennian Homes Bay of Plenty.
• Case by case with Tauranga Generation Homes could include new heat pump, rent or cost of moving into new house.
• Classic Builders offer specials based on square metre rates.