Should you buy an existing home or build a new one?
Category RealADVICE
The idea of moving into a brand new home with everything built and fitted exactly as they have always wanted is very appealing to many homebuyers, especially if it also happens to be in an area they are keen to live in.
"This is evident," says Gerhard Kotzé, CEO of the RealNet property group, "from the growing popularity of plot-and-plan developments in recent years, as well as the premium on correctly zoned stands that sometimes become available as a result of sub-division or densification in sought-after older suburbs.
"And there are certainly advantages to building a new home, including the opportunity to design and customise every aspect to suit your family's needs and lifestyle and also the chance to incorporate the latest energy-efficient and Smart technologies.
"There are also many different options now for building sustainably and simultaneously speeding up the building process. These 'green' options include kit homes and container homes, which are becoming increasingly acceptable to both local authorities and banks as an alternative to traditional brick and mortar structures."
From a financial perspective, he says, eco-friendly homes usually mean lower utility bills, while many newly-built homes also come with various warranties that protect buyers from major repair costs in the first years of ownership.
"However, it must be said that building a new home will generally be considerably more costly initially than buying an existing property. In addition to the price of the land and building itself, the buyer will usually face additional costs for permits, engineering reports and architect's fees.
"Construction costs also continue to rise every year, meaning that the per-meter cost of a newly-built home will be higher than that of an existing home and that buyers may end up needing a bigger home loan than they anticipated - or building a smaller home. And on top of that, the process of home building is notoriously stressful, with costs often rising during the course of construction, and building often not being completed on time or to the buyer's total satisfaction."
Indeed, says Kotzé, buying an existing home is usually much less taxing emotionally, as well as being more convenient, especially when the transaction is facilitated by a reputable, experienced property professional. "Buyers can generally move in sooner and avoid all the hassles of construction. They can also see what they're getting and know the exact price of the home upfront, so they won't encounter any unexpected purchase expenses during the sale process.
"Existing homes are typically also located in established suburbs or estates with existing amenities, schools and services. And those areas usually have a track record for value appreciation, making the homes there easier to market and resell in the future."
But in return, he notes, those buying existing homes usually do have to compromise on certain features, layouts or finishes - and accept that older homes, especially, are likely to require more maintenance or repair work. "The good thing is that it is now relatively easy to retrofit energy-saving systems and appliances as well as Smart technologies, so they can also save money on utilities and reduce commuting by working from home."
Nevertheless, this is not an easy choice to make, and prospective buyers should carefully consider their housing needs, budget, moving timeline and area preferences as well as the attractions of customisation before making any purchase decision.
Author: RealNet
