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Are some new properties better bang for buck than old?
new properties

It’s long been the case that established properties have been the most in demand from property buyers, but in some instances at present, that may not be the case.

Stay with me here…

We’ve noticed over recent times that there are, in fact, some stellar opportunities out there that tick all the fundamentals for strategic property buying – and they just happen to be brand-new or even off-the plan.

Now, this is not a blanket statement by any stretch – rather it comes with a number of caveats… and I don’t mean on the land.

No, what I mean is that in a select few locations in some capital cities there are new houses available for sale that are more affordable to purchase than a similar existing one in the same area.

This is quite an unusual state of affairs given we are currently experiencing underwhelming construction activity and high building costs, which has pushed the price of new builds ever upwards.

However, this isn’t the scenario everywhere.

Location-dependent

We have been helping a number of buyers lately purchase new houses in city fringe locations that not only stack up on price, but also across myriad other investment fundamentals.

As well as that, they are being developed by reputable developers with plenty of runs on the board, as well as being constructed by builders who have long produced superior dwellings.

On top of all that, these houses are located in established suburbs that already have all the community bells and whistles – think schools, transport links, coffee shops, and restaurants – which is the opposite of many of those ghastly cookie-cutter housing estates that are flogged to unsuspecting homebuyers and investors.

There is a saying that you make money on real estate when you buy, which is true, and these types of dwellings are priced affordably but they are not cheaply constructed.

Some of the best new dwellings to purchase in these areas are three-bedroom houses because of the growing volume of smaller sized households.

In days gone by, a four-bedroom house was seemingly considered the be all and end all by homebuyers and investors, but our households are getting smaller, so the sweet spot in my opinion are three-bedroom dwellings.

Not only are the price points lower, but they are likely to be more in demand from renters and future buyers, because of our reducing household sizes.

For investors, of course, cherry picking the best of these new properties brings solid cash flow as well as depreciation benefits. Plus, a brand-new dwelling should reduce repairs and maintenance expenses compared with an established house over the first five to 10 years of property ownership.  

But, like any property purchase, it is vital to not overpay – especially in the new dwelling space, which has a history of baking various builder and developer commissions into the sale prices.

However, this is not always the case and these opportunities certainly appear to be priced to meet the market, whilst also offering an affordable entry point into established city fringe suburbs with plenty of upside potential.

Image credit: Freepik

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