New versus existing homes for first home buyers
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After surviving years of share house living and renting apartments that are a little too small, you’ve finally done it. You’ve reached that magical deposit figure and you’re ready to buy your first house.
The big question now is: what to buy?
Although saving for a home can seem like the hard part, there are still a lot of decisions to make before you find your dream house and sign on the dotted line. The first thing to decide is what kind of home you’d like.
With high property prices, there is often a lot of debate over the pros and cons of new versus existing homes. From homeowner grants to your dream neighbourhood to the style of your home, it can all become a bit overwhelming trying to figure out which is right for you.
Here are a few things you might want to keep in mind when comparing new and existing homes.
Over the last few years, Australia has seen a boom in new houses being built. This is good news for first home buyers as it means there is an abundance of choice when they are entering the market.
One of the major enticements of a new home is the availability of the First Home Owner Grant (New Homes). Under this, first home buyers in NSW are eligible for up to $10,000 towards the purchase price of a new home below $750,000 (this varies from state to state).
In addition to this, new homes will come with a warranty after completion. This period can vary depending on which state you’re buying in. In NSW, it is the contractor’s responsibility to ensure that the work is free of major defects for six years after completion, and two years for any other defects.
This can add to your peace of mind knowing that, in the event of any major defects, you will not be out of pocket for the repair.
Stylistically, new homes have their benefits too. Being newly built, you can be sure that your home will be designed with the most modern aesthetics and appliances in mind.
Something to consider, which is not necessarily a bad thing, is that new builds are often located in new areas. This can mean that you are further from the CBD, which may impact your commute time if you work in the city.
Existing homes are those that have been lived in or sold prior to you purchasing them.
Buying an existing home does not exclude you completely from government assistance in NSW, provided it is your first home. If your home is up to the value of $650,000, you could be eligible for a full exemption on transfer duty under the First Home Buyer Assistance Scheme. Similarly, if your home is valued between $650,000 and $800,000, you could still be eligible for a concession.
Aesthetically, an existing home will offer you a wider variety without compromising on modernity if you set your sights on a recently renovated property.
Older homes can give you flair and character, reflecting the time they were built. Whether that’s a Victorian cottage or a classic Aussie red brick bungalow, there is something for everyone’s taste.
Buying an existing home also provides you with more options in terms of location when considering where to buy. It gives you the freedom to choose an established neighbourhood that suits your needs, allowing you to be as close to or as far from the city as you desire within your price range.
On the other hand, an older property can mean older fit-outs. If you are looking for somewhere to renovate or add your personal touch, this could provide a great opportunity. However, if you want somewhere that is already up to date, you’ll need to keep an eye out for places with recent upgrades.
Another thing to consider when buying an existing property is to ensure you are willing to undertake all relevant inspections. Everything deteriorates with age and houses are no different, but taking the right steps early on will prevent you from being stung by any hidden defects or pest infestations in the future.
Buying your first home is one of the biggest and most exciting decisions you will make throughout your life. By putting in the time to do your research, the hard work will pay off, in the end, to help you become a happy homeowner.
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