As many people swing between tightening their belts and wanting to maximise on the low interest rate, consumers are looking for accessible ways to still buy property, be it old or new
WORDS: ATLEHANG RAMATHESELE
In the current market, potential buyers might still be figuring out if they prefer to build or buy something brand new, or if they’d rather buy an existing property with the potential to renovate.
Stick to what you know
Some people may prefer to buy an older property, because it is ready for you to move straight into and gives you room to transform it as you go along. There are other perks too! Older properties tend to have already nabbed premium and central locations, allowing buyers to smoothly settle in developed areas where access to retail, schools, main roads and a convenient and quality lifestyle is easy.
Due to being in locations that are already built up, there is also a familiarity and ‘tried and tested’ appeal to buying an older property. Erf sizes tend to be larger and that, coupled with revamps, can bolster value. Hugo la Grange, principal, Jawitz Properties Western Seaboard, believes a larger plot size enables effective home improvements. “It gives the buyer the chance to improve on the property by, for example, adding another bedroom or granny flat, installing a pool, fixing up the garden, or building an additional garage. Compared to new builds, where your house takes over the stand and there isn’t much room to play with, a large plot gives you the freedom to add value in a variety of ways,” he says.
Key benefits to buying old
- Older properties tend to be in eclectic neighbourhoods and often have a lot of character and charm whereas newer developments, particularly in sectional title establishments, can have a uniformity to them.
- Resale homes tend to move faster on the market, because the property already exists and lends itself to a faster buying time.
- It can be easier to negotiate prices on existing properties, because they may require a little maintenance and improvement, whereas a new property offers far less wiggle room.
Try something new
While some people opt to build their homes, it can be quite an administration-intensive process with unforeseen costs and delays. This is why others are opting to buy off plan, whether it is for a free-standing home or a unit in a complex, because you can enjoy the flexibility and savings with less of the administrative headaches. In a nutshell, when you buy a plot and-plan in a new development, you can make a selection from something that’s at least in the realm of what you want, but don’t have to deal with a builder, architect or the city council. In some cases, you can even have some say in the finishes and fittings.
Katya Varga, assistant area and projects manager for Pam Golding Properties in Stellenbosch and Somerset West, says plot-and plan residential developments are typically managed by seasoned developers and builders which offer a sense of comfort. “They are well thought out and cohesive in design, while offering buyers a choice of a few plans at different price points, including the interior specifications or ‘look’ such as dark or light options,” she says. Perhaps the most lucrative part of this option is the potential financial relief. “Buyers save on transfer duty as development sales are inclusive of VAT and therefore regarded by banks as part of the purchase price, which means the buyer doesn’t need to fund transfer duty with cash. In addition, more advantageous financing options are usually available and plot and plan purchasers can receive 100% home loans.”
Varga says another financial benefit is the stability it offers, because the end cost is already finalised with a buyer signing a building agreement at a set price. “Furthermore, a cash deposit of just 10% generally secures the purchase, with the balance payable from approximately one to a few years later when construction of the unit is complete. As a result, your acquisition is likely to appreciate in value,” she says. Buying new also offers a great degree of comfort for those who want to invest. Area manager for Pam Golding Properties Sean Coetzee believes this can also minimise hassles for those who want to buy-to-let. “New houses in these developments come with a developer and National Home Builders Registration Council (NHBRC) guarantees, while architectural guidelines create and maintain a standard of construction and design, protecting your investment and preventing a ‘popcorn’ village. A consistent, high standard of design and build quality creates a higher degree of desirability, ensuring house prices are maintained and increase in value,” he says.
Do what’s best for you
It is ultimately up to your personal lifestyle preferences and both options have their merits. La Grange encourages discernment when deciding. “There are still good buys out there for people who want to purchase older homes to flip and resell, but you really need to buy right to make your money over the short term in the current market. Both sides of the coin, new or old, have their advantages and will realise value, but buyers need to decide on what is right for them based on their lifestyles, budget and desire for maintenance and repairs,” says La Grange.
Key benefits to buying new
- With newer buildings, you can enjoy modern design and optimal technology, including all the fittings for satellite TV, speedy WiFi and air conditioning.
- Newer buildings tend to make more room for green and sustainable offerings. You will find a higher likelihood of economical use of water and solar energy.
- There are more warranties for a new build, which enable faster and more cost-effective turnaround times when dealing with any issues and defects.
- When you have built afresh, you will be avoiding maintenance costs for quite some time after completion.