If you’re heading out into the competitive Autumn marketplace this month, you may want to consider your position on buying old versus new property.
In the apartment market, I know some buyers who won’t go near a brand-new block because the strata levies are often not yet set; they don’t know who their neighbours will be and there’s always a risk that the place hasn’t been well built. It would be a mistake to believe that a new apartment will be totally free of defects. Freshly finished décor can hide a multitude of sins. That’s why you should get a proper building inspection as a trained eye will be able to pick up any problems. I also recommend researching the track record of the developer and builder before buying in a new block.
I also know of buyers who love new apartments. They like that everything is fresh and new with all the latest contemporary fittings such as halogen lights, video intercoms, designer kitchen appliances and extras such as air-conditioning. They also draw comfort in knowing the fittings, plumbing and electrics are (usually) in top notch working order.
It’s often also the new high rise apartments that have the great array of residents’ facilities such as a pool, sauna, concierge, communal gardens and barbecue areas. The ‘facilities phenomenon’ is directly related to changes in our lifestyle over the past 20 years. Developers recognise that today’s buyers are time poor and they’re designing new buildings accordingly. It’s fantastic to have these facilities available to you, as it certainly takes less time to walk downstairs to the gym than drive to your local Fitness First, but you will pay higher strata levies for the convenience.
In the houses market, buying new is more of a rarity. The average person doesn’t build a new home with the intention of then selling it. However, you can definitely find good quality new homes in housing estates.
Now, housing estates are not what they used to be and the ‘facilities phenomenon’ of new apartments definitely applies here too. There’s plenty of examples of amazing housing estates with their own café and shopping villages, bicycle and walking tracks, parks, schools and recreational centres. Some estates even have their own golf courses! Basically, you don’t have to leave the estate to live your life.
These types of estates will either sell greenfield sites for you to build on, or they’ll offer completed houses with a variety of floorplans and facades. I’d advise you to avoid the cookie-cutter estates where all the houses are the same. If you’re buying into an estate, buy for the lifestyle it offers!
If you’re an investor, one of the big advantages of buying a newly constructed property is that you can claim depreciation on the building as a tax-deductible expense. For buildings constructed after 15 September 1987, the ATO allows you to write off 2.5 per cent of the original cost of construction each year.
This deduction can provide a significant boost to your cash flow position. If you want to claim this deduction, you’ll need a valuation of the building from a quantity surveyor – usually supplied by the developer. Make sure this is included in your contract of sale.
With apartments, the benefits of buying ‘old’ instead of new is the comfort of knowing the building’s history. Everything related to repairs and maintenance is documented in the property’s strata plan register and you can pay someone to review it for any major problems.
Period features are also a big plus with ‘old’ properties. There’s something wonderful about buying a 100-year-old home with beautiful high patterned ceilings and fireplaces. The historical charm can be really heart-warming and when you’re buying a new property for yourself and your family, these aesthetics can significantly contribute to the ambience of your new home.
In short, there’s no black and white answer. Buying new versus old is largely a personal decision and I don’t recommend one over the other. It’s up to you to consider the pros and cons of each property and make a decision that suits your needs and budget.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
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