We live in a ‘here and now world,’ that demands instant gratification. Most people buy used property because settlement and moving in takes weeks, while building a new house can take the better part of a year. What they don’t realise is that building new generally results in more capital gain when the time to sell eventually comes. Here’s why...
Low maintenance
When searching property listings some advertisements mention the Rateable Value or RV, others list the Capital Value or CV, which is different again to the government valuation or GV. When it comes to price, none of the estimated values factor in the costs associated with ongoing maintenance.
An old, cold villa or bungalow will likely cost a lot more than a newer property to maintain. Weatherboard villas need constant repainting, and you’ll need to set aside over $3,000 for annual maintenance. You could remodel the kitchen and bathroom, but potential buyers may still be grappling with how they’re going to keep that old villa warm. Buying and selling property such as this, may allow you to keep up with market inflation but you’re unlikely to create capital gains.
Newer homes, built to the latest standards using the latest materials, require less maintenance over time. There’s no need to sand back and repaint aluminium windows, and longrun coloursteel roofs are less likely to rust or suffer from a build up of moss.
Read more: Building new vs. renovating your home
Peace of mind
During the 1990s and 2000s unskilled builders constructed poorly designed homes from cheap materials. These properties became damp, rotted and became a health and safety hazard to live in.
Councils have learned from the mistakes of the past, implementing strict rules and regulations about who can build and what materials can be used. Building new creates capital gain because potential buyers know the house is weathertight and correctly constructed by qualified builders.
Instantly livable
Building new basically eliminates the need for renovations when selling. Potential buyers won’t be walking through worrying about the cost of insulating, double glazing, checking the wiring or foundations. That’s added value buyers are willing to pay more for. Any renovations considered by potential buyers are likely to be cosmetic, like the colour of the walls or carpet, which is relatively affordable to change.
If you are thinking about building a new home, then download our home build guide to help you on your journey.
