fbpx
 

A Guide to Old Oroperty vs New property

This is old age debate when buying a property as principal place of residence (PPOR) or for investment. This article mainly focuses on the debate from investment point of view.

There is a lot of  considerations when you start investing in property. What kind of property to buy? Should I invest on apartment or a house? Should I buy old or new property? What kind of budget I shoud have?

 

In this article, we will address the debate around old vs new. Both types of properties have advantage and disadvantages. Here they are:

 

Old Property Pros
  • Well established sales history making it easier to negotiate.
  • Available for physical inspection
  • Room for improvements like a subdivision, extensions and renovations.
  • Stronger performer in the slower market
  • More affordable– older properties are generally more affordable

 

New Property Pros
  • Modern design
  • Quality construction
  • Lower maintenance as the property is new.
  • Eco-friendly, lower energy consumption.
  • New  and improved safety standards
  • Higher depreciation as depreciation rate is higher when the property is new.
  • Lower vacancy as newer properties are in demand.
  • Higher yields – as people are willing to pay a premium for shiny new things.
  • Structural guarantee – up to 6 years

 

Old Property Cons
  • Higher maintenance as older properties will require repairs and maintenance like painting, plumbing repairs, electrical repairs etc.
  • Lower depreciation – all of the properties depreciate most in the first 5 years. The building can be depreciated over 40 years.
  • Higher vacancy rates – due to lower demand as people are willing to pay a premium for new properties
  • lower yields – as tenants mainly pay for the accommodation.
  • Structural issues – older properties tend to have structural issues and there can be a risk to termite damage to older properties and the repair bill can run into thousands.
  • Loss of rent during repairs.

 

New Property Cons
  • Higher outlay form beginning due to higher construction cost and proft made by developer.
  • Slower capital growth particularly in the beginning.
  • Oversupply risk particularly in the newly developed area.
  • No room for improvements like renovations etc.
  • Similar properties in the area and could be far from the city

 

Both the old and new property have pros and cons. The decision to buy old or new depends upon your budget and your short terms and long-term goals. It is advisable to have a combination of both.

 

If you have any more questions about old vs new property, talk to our experts on 1300 537 000

Get Expert Advice on home loans

Talk to a home loan consultant

We are available 7 days till 9 pm

Need more information ?
info email
Drop us and email – We’re here to help.

Like to meet and discuss face to face?
appointment
Book an appointment with a Consultant

We negotiate better rates with these lenders for you

Compare up to 4 providers
Clear Selection