Apartment buyers are often confronted with the most basic of questions: should I purchase a new unit, or opt for an older building that has long since passed its teething problems?
Unfortunately, the answer is as old as the question: it depends! There are pros and cons to both options, as we have listed below. This list is suitable for both owner-occupiers and investors, although investors can be easily swayed by more modern complexes, as they attract tenants faster, offer higher rents and provide greater depreciation tax benefits.
NEW APARTMENT ADVANTAGES
New developments combine lifestyle with the practical needs of a home. A modern complex will usually include a swimming pool, gym and sauna and possibly tennis courts.
Floor plans are more sophisticated as architects ensure every square metre is used productively. Resident access to car parking, storage, and in-house amenities is also given greater consideration.
The ubiquitous digital entry of modern apartments means that you can be confident your home is always secure. If you travel a lot, that’s a real benefit.
Lower maintenance costs
If all things are equal, you should find that new apartment blocks require less maintenance.
NEW APARTMENT DISADVANTAGES
Newer apartments usually cost more because of superior building standards, design, modern appliances and building facilities.
Features such as a swimming pool aren’t free. Your strata fees go towards their maintenance, and they can be far higher than those required in older buildings.
If you’re looking for an opportunity to add value to your apartment, you are unlikely to find much potential for this in a new complex.
OLDER APARTMENTS ADVANTAGES
For first-home buyers, older units offer the cheapest way to enter the property market.
The opportunity to increase value is greater in an older building, especially if it has architectural value.
Older apartments generally tend to be larger. And if you can find one that doesn’t waste any space like an internal hallway, that’s a bonus.
Often older units blocks are closer to essential amenities such as hospitals and schools, which were often built around the same time.
OLDER APARTMENTS DISADVANTAGES
This is where you must be careful. Your due diligence must assess the strata committee and funds set aside for maintenance. Find out whether any major works are planned. You might end up paying for them even if you have only just taken ownership.
Slower value gain
Older units don’t get the value growth of modern apartments. But then, they’re cheaper to buy. So it’s swings and roundabouts.
Harder to resell
The time will come when you want to move on. Buying a unit with limited appeal may be cheap now but in the long run it may be harder to exit.
Tougher to rent
Some first-home buyers will see this first unit as a potential investment property. Be aware that you’ll get a lower rental return than modern apartments.