The Pros and Cons of Buying Development Property
Category Advice
Property continues to be an excellent investment in South Africa. With strong returns and growing demand, many people are choosing property investments for financial security and long-term wealth generation.
If you're in the market to purchase a house (as an investment or to live in) you may have considered buying a newly-built development property as opposed to an already established property. A property currently under development that hasn't achieved an occupancy rate of 80% or more is considered "development property".
If you're not sure whether development property is for you, consider these main advantages and disadvantages of buying within a new development.
The Pros of Buying in a Development
- Low maintenance: As it is a brand-new development, everything about the property will be new and built according to the latest regulations and specifications. Therefore, you'll have peace of mind knowing that you won't need to worry about repairs or maintenance for several years.
- Never been used: Again, as the property is brand new, no one would have ever lived in the house before. Many people love this idea as the home is clean, fresh and untainted.
- Modernisations: New developments often come with all the modern bells and whistles, such as fibre internet and contemporary finishes. This gives the property a leading edge right off the bat.
- Financial savings: A big perk of buying a new property is that you will have zero transfer duty costs as you are the first owner. Further, transaction costs are often paid for by the developer. These savings will make a significant impact on your bank balance - phew!
- Personalised finishes: If your chosen development is still being built, you may be able to select various finishes for the property, such as kitchen counters, tile colours, and cabinets. This allows you to make your own mark on the property.
- Energy efficiency: New buildings are often more eco-friendly than older buildings as they are built with better insulation materials. This saves on your energy bills later down the line.
- Security: Lastly, new developments are usually equipped with high levels of security. Several have access controlled gates with 24/7 security guards. This keeps the area safe and sound.
The Cons of Buying in a Development
- Unexpected changes: Buying off plans is always tricky. You may find that the finished product looks different from the original mock-up you were sold. Further, the finishes you expected may be different in the end due to cost or stock changes during the build.
- Plot sizes: In general, new developments are built on much smaller plots than older buildings. This means smaller bedrooms, less living space, compact gardens, and minimal space between your home and your neighbour.
- Levy increases: If the other properties in the development do not sell quickly, there may be speedy levy increases for the current owners as the weight of the development's expenses need to be shared.
- Time loss: Builds take a long time to finish and can often fall behind schedule. By the time your property is done, the market or your living situation may have changed.
- Disruption: If you move into your new home while the rest of the development is still being completed, your first few months there may come with shouting, drilling, road closures, mud, trucks, and more.
Are You Ready to Invest in Development Property?
Although there are cons involved when purchasing a development property, the pros outweigh them by far. However, it all comes down to personal preference.
If you're looking for a more modern home with minimal maintenance and a safe environment, a new development will suit you well.
If you'd prefer a larger living space and a big garden, then stick with an older property.
Either way, we'd love to help you find the perfect home. We have several developments and older-style homes we can show you. Get in touch today to find out more.
Author: SAProperty.com
