What to consider when deciding between a new or an established property

When looking to buy a home, one question buyers face is whether to purchase an established property, or to buy land and build a home from scratch.

While both methods offer significant financial and social benefits, ultimately, the “better” method depends on the priorities of the buyer.

Buying land and building a new home from scratch offers several unique benefits not available when you purchase an established property.

Consider it like buying a mode of transport. What’s better – a Prius, a motorbike, a sexy two-door sports car, or a Range Rover? They’ll all provide transportation, but do they cater specifically for your needs?

What to know: Established home

Buying an established home offers several key benefits that appeal to buyers.

Generally, an established property will be located closer to a city centre than a new home (as vacant blocks are becoming rare in inner-city areas), and therefore be nearer to facilities and infrastructure such as schools, employment opportunities and public transport.

Not only is this location usually considered preferable, but the parcel of land the home sits on will generally be bigger than what’s offered for new builds.

An established property often has a nice-sized yard along with a good-sized house, something you generally have to pay through the nose for in a brand-new build.

Buying an established home is a quicker process than building a new house. Once the initial house hunting is done and the deposit has been paid, buyers can often move in and start their new life in as little as 30 days.

New homes, on the other hand, require months to build and have the potential extra burden of delays and complications. Because of this, many buyers will need to continue renting another property while their new home is being built. 

There is also an enormous time drain to pick all of the finishes, colours and fittings for a new home. This is even more time consuming if building an architectural home.

Another factor to consider is the positive impact of established gardens, parks and trees in longstanding homes, which are often lacking in new housing estates.

If you ever drive through a brand-new estate the missing foliage and flowers are starkly obvious.

Gardens are overlooked when locking in a mortgage for a new home but perhaps they should be listed in the cost … If you have never set up a whole garden and lawn before, you may not be aware how very costly it is.

A key question buyer must ask themselves is whether they are looking for their forever home, or an investment property. If it’s the latter, the established home is generally the better bet.

If first home buyers want the opportunity to move to a second bigger and/or better home, they need to ensure that their first home will grow in value to allow for this upgrade.

Buyers can also more easily compare prices and investment results of similar properties when dealing with established homes.

Purchasing an established home also offers buyers a good understanding of the design, style and price point for other houses in the area, allowing them to understand the home’s future financial value.

Buying the right established property can add instant value with the right makeover and they could find themselves up levelling to the property of their dreams much faster. Getting the right home loan with your property is also very important, with over 40 lenders on platform, you will get a better loan with loansHub.

At a glance…

·       Closer to the CBD and established infrastructure

·       Better investment potential

·       Larger land parcel

·       Comes with established landscaping

·       Can move in quickly

What to know: New home

Buying land and building a new home from scratch offers several unique benefits not offered when purchasing an established property.

Many first home buyers are drawn to this option due to the savings and concessions available, such as reduced stamp duty and the First Home Owner Grant.

If you choose to use your new home as an investment property, you can claim depreciation quite rapidly over the first few years, which is a good tax benefit to take advantage of.

As a new home is more likely to be built to a higher energy efficient standard and carry fewer maintenance issues than an established home, there’s also the potential ongoing savings.

Even if issues do arise, these will generally be covered under warranty. You have a house that you won’t have to put any money towards over the next few years. Everything is nice and new, so there is no work to be done.

Of course, the major draw card of a new home is the creative control this offers buyers.

The stories you’ll share with your mates while you’re enjoying a cold one around the barbecue become more real and you’re passionate about them because you were involved in the process.

This method of buying can be particularly rewarding, and arguably gives vendors more bang for their buck.

And while building may be the more time-consuming process, it can save buyers several weekends of time spent at inspections, auctions and negotiating with agents.

If you’re looking for a home to raise your family and live in for decades, the new build can be a fantastic option.

At a glance…

·       Can be built to your exact specifications

·       Lower ongoing costs in terms of maintenance and energy

·       Significant buyer incentives such as the First Home Owner Grant

·       Less competition to buy land

·       Issues and defects covered under warranty

Whichever option you choose, do your research and make sure that it’s the right choice for your needs.

Enjoyed this article? Check if you Qualify for a mortgage with loansHub and discover how much you can save on your home and investment loans by using loansHub technology as your personal mortgage manager. To read more insightful articles, click here.