Here’s a brief overview of the advantages and disadvantages which need to be considered when deciding whether to build or buy a house.
Buying an Existing Home
Advantages:
From a security point of view, (and also from an insurance premium point of view), it is less likely that there are vacant stands that surround the property.
Established neighbourhoods generally have the necessary major arterial routes and amenities, including a central business district, public transport, schools, shopping centres, and so on.
It may be easier to obtain objective opinions in terms of current and future property values in an established area.
The average land area, total building area and the average size per room of older properties is generally larger than that of new residential stands available or newly built homes.
One can obtain expert advice on existing structures if there is uncertainty about the structural aspects. Defects and poor workmanship can be inspected for quality.
If the property is bought at a reasonable price, it could be cost-effective to renovate giving it a fresh and modern feel.
Disadvantages:
Deteriorating properties in the vicinity may have a negative effect on the property value.
Older properties are sold ‘voetstoets’ without a warranty.
The design, layout and finishes may not be in line with your personal taste or the latest fashion trends, and renovating may be too costly.
Defects may be invisible at the time of viewing and could end up costing you a lot of time and money in repairs.
Building a New Home
Advantages:
When buying a home from a developer, VAT is normally included in the price. There is no additional transfer duty to be paid on top of the purchase price.
You have a 5-year major structural defect warranty as well as a 1-year roof leak warranty from a building contractor registered with the National Home Builders Registration Council (NHBRC).
Properties in your immediate area are usually also new and still well maintained, modern, and so on, and this will have a positive effect on the increasing value of your new home.
You are generally able to choose the design, layout, finishes and everything else to your needs and preference and in line with the current fashion trends.
The initial maintenance cost is low.
Disadvantages:
New developments and vacant stands are mainly on the outskirts of major urban areas, which may be a disadvantage in terms of security and accessibility to necessary major arterial routes and amenities.
The future development of major arterial routes may add to noise and other pollution and the development of low-cost housing or the formation of informal settlements on vacant land in the near vicinity may cause property values to stagnate or even decline.
You cannot be sure about your privacy if your neighbours have not yet built their homes around you.
Major additional expenses for an architect or engineer, land preparation or excavation with unforeseen ground formations, and so on, may need to be taken into account.
There may be uncertainty about the quality of workmanship and material to be used.
The building project may take longer to complete than anticipated, which will create problems for you in terms of an occupation date.
Stand sizes are generally smaller than those in established older areas.
Relatively small stand sizes.
You need to keep your eyes on the project to ensure that what you had in mind from the start, is what the project turns out to be – this can become time-consuming and put pressure on other daily responsibilities you may have.
This article originally appeared in Property Power 13th Edition Magazine. To order your copy at the discounted price of R120 click here.