Many buyers may initially opt to purchase an existing home as they are often cheaper; however, there are many benefits to purchasing/building a new house as well. Which option do you prefer?
Purchasing a new property is becoming easier for first home buyers as the government has implemented certain cash incentives. In an attempt to boost the building sector, many state governments have increased the first home buyer grants for new homes and terminated the grants for existing homes. Make sure to check with your state government to see what grants apply to you.
However, first home buyers need to be aware of builders who may take advantage of these grants and increase their prices so that you end up paying the full price for the property and the builder pockets the extra cash. It is up to you to do your research to ensure the property is priced correctly.
Another benefit of purchasing a new home is that everything is new. This means that there is little chance of any maintenance costs popping up in the near future. Also, when it comes time to sell the property, it will be more appealing to potential buyers and therefore, may be easier to sell than other older properties.
One of the benefits of buying an existing home is that you usually have a bigger selection of locations. Existing homes are usually in areas that are already developed and closer to necessities such as shops, schools and work. As most city areas are limited in space, new housing developments are often further out from the central part of town.
Existing homes are also a great option for investment properties as the rent will be more affordable for tenants and will usually be in areas of high demand.
As existing homes are often older, there is a greater possibility of maintenance and repairs needed. However, this will usually mean that the purchase price will be lower, resulting in smaller loan repayments.
After looking at the advantages and disadvantages of both, when it comes time to decide on either a new or existing home, there are several points to consider:
1. Affordability – This doesn’t just refer to the purchase price. You will need to consider if you can afford the loan repayments and ongoing maintenance costs (particularly for pools, landscaping)
2. Investment – If you are thinking of turning this property into an investment home, you will need to look at the house objectively and take your own personal style out of the equation.
3. Location – Will the new location affect your commuting time to work? Is it close to a main road, train tracks or airport? It may also be worth looking at the development of the area. If it is a fairly new area, the development of new shops and public transport may boost your property’s value a few years down the track.
When it comes to finding the right property, there is no clear black and white answer. Although property hot spot areas are a good place to start to get a general overview of the market, what may work for some people, may not work for you. This is why doing your own research is so important.
Anouska Linz is Manager, Online Sales at State Custodians and has over 10 years’ experience in financial services, both in broking and banking. Holding a bachelors degree in accounting, Anouska quickly discovered a love for mortgage lending and assisting people to achieve their home ownership goals. She leads a team of highly experienced lending specialists who are passionate about finding lending solutions which result in real wins for the customer. She is also a massive netball fan.
For more information on our home loans, visit www.statecustodians.com.au or call 13 72 62.