Many opt to be the first to live in a property as there are advantages, including no transfer duty and less maintenance needed but you often get more space with established properties.
The idea of moving into a brand-new home and being the first people to live in it is exciting. It represents a blank canvas on which to build memories and a clean slate to decorate as you please.
Everything within the property is brand new, including fixtures, fittings and all the electrical connections. Who would not love an opportunity to buy a new property? And, given a choice between such a home and an existing one, why would anyone really choose the latter?
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Actually, say the experts, there are some buyers who would, although many do prefer the idea of a new home. “The right home is the one that works best for you,” says Gus van der Spek, chief executive of Aview Properties. “It depends where you are in your life stage and what you are after.”
NEW VS OLD: PROS AND CONS
If you opt for a new build, you will be rewarded with modern features, more amenities, a greater resale value and flexible financing, he notes. Also, you will not need a deposit, says Andre van der Merwe, principal of the Chas Everitt franchise on the East Rand. In most cases, no bond or transfer fees are needed either.
“The major reason for choosing a new build is that the property is brand new with little maintenance required.” David Sedgwick, managing director of Horizon Capital Residential, says new home advantages include being able to personalise it with your own finishes. “There is also the feeling of ‘new’ and being the first person to live in it. New properties include a five-year latent defects liability, and as newer buildings are more energy-efficient, monthly operating costs are generally lower.”
Paul Upton, head of developments at Dogon, points out that developers will often be open to allowing buyers to select their own internal colour scheme and choice of finishes, provided they commit to these prior to installation. But there are disadvantages too. New homes take time to build and you should expect delays, Sedgwick says.
There might also be a difference in your expectations and the reality of the end product. And new builds are sold at a premium price compared to existing properties. “The advantages to older buildings are that they usually have a larger square meterage than new developments. You can also physically see what you are buying.” Van der Merwe agrees: “Often a brand new home comes at a premium in terms of both price and smaller size. But existing homes still have transfer duty payable and often may require a deposit.”
In addition, existing homes can have hidden maintenance issues that are picked up only later on, Sedgewick says. Older buildings are also not as energy efficient as new ones, these properties might also need some updating or renovating and there will be a transfer duty cost.
Older homes could have issues with design flow and, when fixing up or extending, it is often difficult to stay on budget, say Charl and Adel Louw, who head up the Chas Everitt Cape Town Northern Suburbs, City Bowl and Atlantic Seaboard franchises. By buying a new build, though, Upton says you are saving on the “hassle-factor” and dreaded “unknown final price” of attending to alterations when customising an existing property.
NEW VS NEW: HOW TO CHOOSE
When choosing a new build, Van der Merwe says it is important to trust and know the developer and to be wary of new builds in locations that border on areas that may degenerate in the future. “You should also have a look at the developer’s previous developments to check that you’re happy with the quality of the finishes,” Sedgwick says.
Other considerations are:
• If the apartment is small, is there a communal space for residents to enjoy in the development?
• Is there secure parking?
• Is short-term letting allowed?
• Is the building pet friendly?
• Is it in a good location where you’ll get good capital growth?
• How many apartments are in the building? Are there too many? If so, be aware that this makes for a very competitive market if you’re planning to let it.
• Is the development purely for investors or are there owner-occupiers too? It is nice to have a balance. Van der Spek also says you must do your homework on the developer. “Look for a company with a reputable track record and good references. Also, be sure to check for snags and put everything in writing.”
A large component in deciding on a new build is the team employed to deliver on your expectations, Upton adds. Van der Merwe says you should ensure you understand the agreement you signed and know when occupation will be available, and what the occupational rent will be if you move in before the property is registered in your name.
“Know what the estimated levies and rates will be if it is a sectional title property, and take these amounts into consideration for your affordability.” Upton says other important aspects of purchasing in a new development are understanding the product being offered, the orientation of the home, privacy issues and the specification of finishes down to the fine detail.
For buyers of new homes in Cape Town, Charl Louw says good roof designs are vital because of the weather conditions. “Some types of roofs are prone to leaking. You cannot see damp in a new building, so buyers have to ensure that walls and foundations are properly sealed,” he says. Adel Louw adds: “Make sure you have some measure of guarantee for at least the first year to manage unforeseen maintenance issues.”
If you have decided to buy a new property you should also think about additions, such as a swimming pool, fireplace or air conditioners at this stage, Upton says. “Additions like these are far easier to arrange prior to construction because the planning for services is simpler and more cost-effective when compared to ‘retro fitting’ additions.”