There is no right or wrong answer, it all depends on your personal situation. If you’re buying a home to live in then the answer is really a lifestyle choice.
Do you want to avoid maintenance or do you like renovating? Do you like the affordability of a big block in a new outer suburb, or do you prefer the convenience of established suburbs closer to the city? Depending on your answers your decision to buy a new or old property will be fairly obvious.
But what if you’re buying to invest? Which type of property grows more in value?
In most cases, you’ll see greater capital growth with an established property, argues Property Update.
Here are #3 reasons they give in favour of buying an established property.
- Buying a new unit that is a carbon copy of every other unit in the block means your capital growth fortunes are largely tied to the rest of the block. You should instead look for a ‘scarcity’ factor. That means look for unique, in-demand features that will make your property stand out from the crowd such as period features, or a second garage. These may be easier to find in an established property.
- In some markets people fall in love with period homes. So while those project homes with white benchtops and stainless steel appliances are shiny and clean, they can appear downright clinical compared to the charm of an old home. In Brisbane you see this trend in Queenslander-filled suburbs like Paddington.
- Lastly, you need to consider the ‘land to asset ratio’. This is based on the premise that it’s the land value – not the building – that drives capital growth over time. If you buy one of 100 units in an apartment tower your ‘land to asset ratio’ is not as strong as if you bought a townhouse in a block of three, or even a rundown house on an inner city block.
If you are looking to invest get independent financial advice on what’s best for you and talk to local agents to build your knowledge of your local market.