New homes vs established homes: The pros and cons
Choosing whether to buy a new or an existing house is a big – and sometimes confusing – decision. Here are some perks and drawbacks of each option to help you figure out the best pathway towards your first or next home.
From eco-friendly considerations and how well a neighbourhood ‘gets you’ to ongoing spend to keep a property looking schmick, there can be significant differences between buying an older, existing house and investing in a brand new one. To help you get your head around some need-to-know information about each option, let’s dig a little deeper into some of the pros and the cons involved.
It’s an obvious benefit, but it can be a big bonus compared to buying and moving into an established house which – depending on its age – might need some big-spend rooms like kitchens and bathrooms ripped out and replaced immediately. As well as being convenient, this can also help reduce costs as it eliminates the unforeseen spending that comes with renovating.
You have flexibility to design the house you want
If you’re building your home, the fittings and finishes won’t only be new, but also a reflection of your needs and tastes. You’ll also have freedom to choose the floor plan and configuration of rooms according to what suits you and your family best.
You can choose an energy-efficient house design
Whether it’s a white roof to reduce heat build-up, LED lights to help downsize your power bill, or rainwater tanks and a solar hot water system, building a new house gives you the chance to build smart, rather than trying to retrofit an established home – which can be more expensive and less effective. Plus, on top of energy-efficient house features, even the floor plan and house orientation on site can be optimised for energy efficiency.
The stamp duty might be less
When you choose a house and land package as the route to your new home, provided the house hasn’t been built yet, you’ll only have to pay stamp duty on the land part of the package. The upshot? You’ll pay less stamp duty, which is a tax state and territory governments charge on certain transactions including purchasing real estate, compared to buying an established house of comparable land and building value.
You’ll be part of a well-designed community
If you choose a lot of land in a masterplan community, like one of Lendlease’s communities, to build your new home on, design guidelines ensure that every home in your new neighbourhood is built to a consistent standard. Plus, thanks to Lendlease’s commitment to creating thriving, connected communities, you’ll also be surrounded by outdoor spaces and facilities that support a healthy lifestyle. No more driving to another suburb to get your fitness or relaxation fix… love that for you!
If you’re building, you can’t move in right away
That said though, the process of building a house might take less time than you think. However, you should still expect to be subject to variable building schedules which shift and evolve over time; something that can be avoided if you move straight into an established house.
There’s limited opportunity to add value
Without the need to renovate or improve on a new home’s features, it can take more time to enjoy capital growth compared to an established home that undergoes substantial renovations.
You can track the property’s history
And other comparable properties like it in the market. This not only means older properties have a proven resale value, but it can also give you an accurate indication of a house’s current value.
Once you settle, you can move in
Not having to wait for the house to be built means you’ll be able to call the place yours and start living there, sooner. This isn’t exclusive to established homes though – buying a brand new home that’s already been finished delivers the same benefit.
You can renovate to add value
Sure, the kitchen, bathroom or living space might not be to your taste or designed to suit today’s lifestyle, but that can be an opportunity. Provided you can afford both the cost and the upheaval involved in a renovation, once it’s done, your property will be more liveable and – as long as you don’t overcapitalise – may be more valuable, too.
They often come with character
This will very much depend on the type of established house you’re in the market for and are able to buy in the area you want to live, but a house with history often means period features and a certain sense of charm. Also, established houses, more often than not, reside in established areas, so you can explore the community and its surroundings more before you move in.
The maintenance costs
It’s no secret that with age comes normal wear and tear, which means you may have to address issues such as repainting, repairing structural components or replacing building materials or outdated equipment, sooner than later.
The renovation costs
Renovating can add value to your property, but it not only costs money above and beyond what you’ve already spent on the house, how much money you’ll need can often be a bit of a moving target – which means having a flexible budget or being able to borrow more money if you need it.
They’re usually less energy efficient
Given that energy-efficient features in a house build is a relatively new priority – and a design concept that’s evolving and improving all the time – depending on the age of an established house, there’s a good chance it includes very few, or even no, elements that make a house more comfortable and eco-friendly to live in.
With welcoming communities all over Australia, if building your new home sounds like the right option, now is a great time to explore the possibilities.