3 Essential Considerations for Buying in a New Development
With so many developments popping up around the place, it’s now easier to buy a new property rather than an existing one. Imagine moving your furniture into a brand new space, knowing you were the only people to live there, and that there would be no maintenance any time soon. Sounds great, doesn’t it? But is it actually realistic?
It’s easy to fall into the trap of assuming that a new property is always going to be better than an established property, but there are a few things you should keep an eye on if you want to make sure your investment holds its value.
1. Developmental health
Developments are becoming more and more common, and they might take the headache out of building, but they do come with a few areas for scrutiny.
One is uniqueness — what differentiates this house from its neighbour? What features does it have to make it stand out in the market? If you can’t come up with an answer, chances are that your property’s value will stagnate if the neighbourhood does. If your neighbour decides to sell at the same time as you (or even someone a street over), what selling point will make a buyer pick your place over all others? The larger the development, the more problematic this can be, so make sure you’re buying something special. If you’re not sure, try and stick to smaller developments, where the exclusivity will be its own selling point.
2. Know the local market
Think about it for a minute: if the land is only just being developed now, chances are it’s not ‘premium’ land. This is good for you, because most ‘premium’ land has already appreciated and is likely far more expensive than where you’re looking. In time your property value will shift with demand, but make sure you aren’t paying premium prices for non-premium properties. Think about the types of people your property will suit (that one-bedroom studio probably can’t host a family of four) and ask yourself what they would expect nearby. Schools are an obvious one, but what about cafes, shopping centres and supermarkets? Know the area, do your research for other developments in the pipeline, and make sure you have some idea of what your neighbourhood will look like in the future.
This is particularly important because properties in new developments are often a little more expensive than their actual market value, to cover the cost of all the advertising etc. for the development. While this is to be expected, it means that real estate agencies are trying to include the promise of future development in the house they’re selling you today. By doing your own research, you’ll be able to make informed decisions about what constitutes a fair price for your property, for now and the future.
3. Maintaining appearances
Even if your property is maintenance-free, there may be other costs down the line. For example, there may be strata fees due every quarter. Each development will have its own fees, and it’s up to you to make sure that you’re getting the best value for your money. What constitutes a reasonable fee depends on the location and quality of the development, so it’s worth doing research to make sure you’re not paying to indulge someone else’s whims.
There’s so much decision making involved in buying a house that it’s easy to feel swamped and skim over the details. A development might seem like a dream come true at a glance, but by asking the hard questions and doing your homework, you’ll be able to find not only your dream home, but also an investment that will bring strong returns in the years to come. Remember that it’s always better to find out now rather than pay later.