One of the many decisions to make when it comes to buying an apartment is deciding between an older, established development or a newly built one. Broker Manager of RE/MAX Central, Cameron Jansen, says that to make an informed decision, buyers will need to look at the pros and cons of each option and see what fits into their criteria for purchasing a home. “Each option has its benefits and setbacks, so buyers will need to assess what makes the most sense to them regarding their current lifestyle needs,” he adds.
Jansen says that there has been a general softening in the market over the past while and developers have been dropping their prices quite remarkably to remain competitive. “In fact, in certain areas, developers have dropped their prices by as much as 25%. The drop in prices has made purchasing a newly-developed property a very attractive option for buyers at the moment. Aside from the pricing, other draw cards of these homes are that there is no transfer duty, the home has never been lived in by someone else, all aspects are brand new, and there is no worry about the voetstoots clause,” he says. “Also, a lot of developers are also throwing in appliances to sweeten the deal, so buyers are getting a property with a washing machine, tumble dryer and sometimes a fridge. For a first-time home buyer, some of the offers that developers are making are very attractive.”
He notes that the alluring deals and competitive pricing of new developments have placed pressure on the repeat sale market. “While established properties were seeing an excellent growth in price in the past, this has slowed, particularly in the sectional title market. The pricing pressure created by the new developments has forced sellers to adjust their asking prices to remain relevant in the current market,” says Jansen.
With all the benefits of buying in a new development, is buying an older apartment worthwhile? “Of course,” says Jansen, “an older property is more of a known entity. Whatever teething issues that may occur in the initial stages of development have already happened and an older development is far more settled. Effectively the buyer knows what they are getting, and there is no snag list where they are waiting to have issues repaired. There is also the matter of size. Older apartments are generally a lot bigger than the newer ones we see nowadays, providing the buyer with more bang for their buck.”
According to Jansen, another benefit of buying into an older development is that the body corporate has already been set up and they have been generating financials for some years. As a result, buyers can determine whether the development is well run and what the projected costs will be for levies and other related fees. In a new development, the body corporate is essentially run by the developer, and there are a few aspects that are in a state of flux in the initial stages.
When it comes to security, there could also be some challenges in a new development. “If the buyer purchases a home in a multiple phase development during the initial phase, they will essentially be living in a construction site until the project is complete. As a result, there will be construction workers and contractors in and out of the development throughout the course of the day. Aside from the security issue this presents, there is also the matter of noise that accompanies construction and building,” says Jansen.
He notes that bearing with the construction may be a small price to pay, especially considering the additional facilities that newer developments have on offer. “Many developers have asked agents what buyers want and have catered to the modern buyer’s needs as much as possible. For example, many new developments now have fibre internet connections and energy-efficient components as part of their design”, Jansen adds.
“While there are appealing elements to either choice, what it all boils down to is whether the home is right for the buyer. Is it at the right price and in the right location? If the answer to these questions is yes, then the rest is just details and personal choice,” Jansen concludes.