Buying a New Home vs. Buying an Existing House

There are a lot of advantages to buying a new built home. It is an exciting prospect where everything is new, clean and unused. The fitting and fixtures and the appliances are new and have zero scuff marks or the usual wear and tear and they are also generally more energy efficient etc etc etc... you know the ‘new build’ story.

However, as a long time property owner, investor and past renovation ‘expert’, I have come to realise that there is no one solution that works for everyone. There are times when buying new has its benefits, but there are also significant advantages to purchasing an existing, established property instead of a new one.

In this first article, we'll review the upsides to buying an existing home to help outline the main benefits of an established property so you can make an informed decision if this is the right path for your own situation. Here are four of the most important upsides:

1. Do existing homes cost less than new build houses?

Simply put, new homes cost more than comparable existing established homes. It’s just like a buying a brand new vehicle, you’re paying a mark up and premium for being the very first owner of your new car. Also and more importantly, we’re coming off the back of a national housing boom here in Australia, where global supply chain shortages are creating extended delays which in many cases have seriously affected the new build home prices as a direct result. This increasing cost impact will take a while to iron itself out, but costs for raw materials or available stock is still on the rise. This lowers the profit margins for a new home builder, and necessitates a higher sale price, couple this with extended construction delays and the true story manifests. This same limitation is not present for many existing homeowners, many of whom have amassed a large amount of equity and are more willing to negotiate on price. While homes were selling quickly for close to full list price, the booming ‘market’ has softened across most major centres and this also compounds the upside potential when negotiating with your next seller on an existing home.

2. Will you save time and energy and will give you peace of mind?

Building a new home in Australia used to take anywhere from 4 - 12 months, but with the current global supply chain impacts at play, fully expect the new build construction timetable to blow out - especially if building two or more stories. Unless the home you’re buying is already done and ready to moved into, you’ll have to wait until construction is complete, final inspections have been completed, and occupancy permits granted before you can move in. In the current construction climate, it’s more likely, you’re looking at 1 - 2 years for a completed new build to be fully handed over to its new owner. While the construction and handover process can be smooth and reasonably seamless, issues generally arise throughout the construction and inspection/handover process that delay your move-in date. This can be extremely stressful and present an added ‘living’ expense especially if you’re renting while building or selling your current home. Buying an existing property in this same market is straight forward by comparison and the sale can be expected to be easily completed within 60 - 90 days, and in many cases within shorter timeframes.

3. Would the built structure and surrounding landscaping of an existing and established home have had time to mature and blossom?

As hinted at above, I have yet to come across a new construction built home that did not have a least a few issues that arose within the first year or two of occupancy. It’s almost inevitable with the more complex building systems that are prevalent in construction today. New homes need time to settle and be lived in for a while for the once hidden issues to fully present themselves. While living in a new home is nice, issues do arise and the remediation process can certainly be a bit of a pain especially when existing delays means the builder may not be able to resolve the issues in the near term.... However, a well-maintained existing home will have had ample time for issues to present themselves and generally these would have been addressed by the previous owner prior to the final sale.

The very same holds true for the garden and any landscaping: During new home construction, the property lots are generally flattened and graded, then left almost barren (except for the construction waste) until the home is mostly complete. Then the landscaping, laying of irrigation and turf and any other vegetation is planted. These new structures and plantings need sufficient time and a lot of work to stabilise, take hold and mature. In my opinion, one of the most attractive and appealing features of a well maintained existing home is the established landscaping and blossoming plant life that envelopes the house.

4 - Can existing and established homes be more eco-friendly?

Given a large amount of new construction material, energy and time (cost) is consumed during the planning and final construction process of a new home, the positive and negative environmental impacts are anything but clear. Utilities (gas, electricity, water) are sometimes cheaper in older buildings because they use less energy and water than modern buildings. Even using modern Green design and building materials and practices, the overall environmental impact of building a new home is generally higher than buying an existing one. So if you really want to go green, buy existing!

Final Thoughts...

The pros and cons listed above are inevitably quite general in nature. Everyone has a unique situation or list of requirements which will differ from person to person or family to family. In my opinion, the best way to go about choosing whether to build a new home or buy an existing, established dwelling is to thoroughly examine all of your actual requirements, needs and the key factors that matter most to you, and fully explore all of your available options.

Much like anything else in life, speaking and working with an expert in the property buying domain can help you thoroughly examine your key property and lifestyle requirements,

unique to your own situation, which can only aid you and help inform your property choices. Purchasing a home can be a very stressful process and is a very big decision that involves a myriad of moving parts. Having a trusted professional in your corner to help guide you through the pre-purchase evaluation and the final selection and buying process will save you money and precious time in the long run.

So, what’s next? 

Still not sure which way to go? If you are having trouble deciding, or maybe you know where you want to live but don’t know where to begin when it comes to choosing a home, Ocean Buyer’s Keeta can help! As a buyer’s agent, it is Keeta’s goal to find the perfect home for you and your family. All you have to do is tell her what you need, and you can leave the rest to her! To get in touch with Keeta, click here.