Monthly Archives

February 2019

Best First Home Buy?

Q: We are first home buyers and are wondering what your advice would be re buying an apartment versus a small home or home unit? Our concern is really around which will be the best investment for us when we (hopefully) move up to a family home in another 5 or so years.

Jerry D.

 

A: We are often asked about this, and it’s quite a complex subject, so we will be answering this in two parts – Part Two next week.

In the past, we have always said “buy land, because they’re not making any more of it” which would suggest that a unit or house with a bit of land would be a better investment than an apartment.

But let’s look at the facts: House values in Auckland have risen by 60.63% since 2012, while apartment values have risen 57.21% (Source homes.co.nz); not a huge difference really. So in terms of future sale price you are probably ok either way.

What may be of more importance to you is how the two differ in terms of initial cost, and on-going maintenance.

Here’s a real-life example: We recently bought an apartment in Remuera, rather than a house/unit. It suits our real estate lifestyle of course, being secure and low-maintenance. But what surprised us was what we saw at the auction. The apartment came up for auction immediately after the auction for a 75m2 brick and tile unit in Royal Oak with about 60m2 of garden/grounds. Now you should know that our apartment is 115m2 and is located in double Grammar zone. It also has great harbour views from a good-sized terrace, and the complex sports a swimming pool and tennis court, all built in the 1970’s.

Now, back to the auction: The home unit was fiercely bid for and ended up at just over $1.1m! Ours was up next and we paid well under $1m, and were left wondering why we hadn’t had to pay more.I can hear people saying: Yes, but you will have a body corporate to pay every year. Yes, we do, and next week we will go into the ins-and-outs of body corp fees and general home maintenance costs. We will also talk about other apartment options.

The Dilemma: New house or Existing Home?

The Dilemma: New house or Existing Home?

Q: We are debating whether to buy a new house in a new subdivision or an existing home nearby. Any suggestions on which is the better long-term idea? Raymond L

A:  Well Raymond, the first thing to consider with real estate is of course: Location. As you are looking at new or old in the same area, then the other things to consider are affordability, securing finance, and what works best for you.

When you build a new property, you have the opportunity to start with a blank slate and can create what you want from the outset. You have the freedom to pick everything from the location, the home’s design, and the other details like wall colours, landscaping, and customised fittings. Unfortunately, most existing homes will require costly changes, renovations, and remodelling to turn them into your perfect home.

The older a property, the more maintenance it requires to keep in top condition. Small issues need to be fixed regularly before they become difficult and costly to repair. Everything in a newly built property is brand new, which means it should require very little, or no, repairs and maintenance. Another benefit is that a new property will be under warranty, and if anything is faulty early on, the repairs or replacement should be fully covered.

When you build new, you are less likely to face issues such as mold, damp, lead paint, asbestos, or even allergens, which can affect your health and wellbeing. With new, energy saving standards being implemented throughout and modern appliances, your new property should also have better heating, cooling, and ventilation, which is good for your family, as well as the environment. 

The latest building trends are all moving towards smart technology, and ultimately changing homes into smart homes. Not only is new technology convenient and exciting, but it can also make a huge difference to the efficiency of a property and drastically reduce utility bills. Your builder should be able to give you options to choose modernly advanced, building materials (which are usually more durable, safer and easier to maintain), as well as a choice of technology for your new appliances, and heating, cooling, and safety products.

A brand-new home should already have a higher value than an older, but similar home from the start, but when you build you also have the power to choose every detail of the home with future value in mind. This means that you can choose design features like a stylish elevation, open floor plans, ensuite bathrooms, high ceilings and outdoor living areas, which will be highly desirable to future buyers.