Here's why new developments are back in favour
Category RealADVICE
Rising interest rates mean falling affordability - and this is currently being reflected in home buyers' increased interest in new, multi-unit developments where there is no transfer duty to pay, and where developers may also be willing to subsidise other transaction costs such as bond registration and legal fees.
So says Gerhard Kotzé, MD of the RealNet national estate agency group, who notes that the lifestyle changes that are evolving in response to Covid-19 is also driving demand, especially among young buyers, for homes in urban rather than suburban locations, and especially in buildings and complexes that offer their own co-working spaces, restaurants and recreation spaces, sports facilities and concierge services as well as state-of-the-art security.
"In many cases, the shared costs of the land - some of which has been held by developers for several years - is making it possible to offer units in these 'whole life' developments at relatively low prices, which makes them especially attractive to first-time buyers. There are currently quite a number of apartment developments even in prime areas of Cape Town and Sandton, for example, that have units available at prices from around R1m."
In addition, he says, there are several other factors in favour of buying into a new development. These include:
- Excellent security. Modern apartment blocks - and gated estates - usually offer much more personal safety at much lower cost than buyers can achieve in pre-owned homes, and the newer the development, the more up-to-date its security equipment and access control methods are likely to be.
- Modern designs, fixtures and fittings that are more suited to contemporary lifestyles, as well as energy-saving provisions and internet-ready homes.
- Less maintenance, more energy efficiency and lower incidental costs for at least the first few years of ownership, especially when compared to the costs of fixing, renovating or adapting a pre-owned property to get it "right".
- The geological and engineering reports as well as the structural and roof warranties that builders are required to provide for new developments. There are no such assurances on the purchase of a pre-owned home, for either the lender or the buyer.
- Easier financing. When you buy a newly-built home, the developer will usually have a mortgage origination consultant on hand to assist you to obtain a home loan and/ or an arrangement with one or more lenders to grant 100% home loans at attractive interest rates due to there being a lower risk in the property.
Author: RealNet
