Established Home vs. New Build: The Advantages and Disadvantages

How do brand-new homes measure up? Let’s take a closer look.

Pros:

• Government incentives: Depending on your state, you could save on stamp duty, as it’s typically only payable on the land value with new house and land packages.
• Tax benefits for investors:  New or off-the-plan properties may offer attractive tax benefits for investors, with potential depreciation claims on costs like furnishings.
• Lower maintenance costs: New homes usually come with fewer ongoing maintenance and repair expenses.
• Rental returns: Newer homes with modern interiors often attract more tenants, potentially leading to higher rental returns.

Cons:

• Affordability: In some states, new homes and units can be pricier than similar-sized established homes, making budget a key factor.
• Lower land-to-asset ratio:  New properties might offer less capital growth potential due to the typically lower land-to-asset ratio.
• Limited infrastructure: New homes and land packages may lack established infrastructure, both on the property and within the surrounding community, especially in new housing estates.
• Higher risk: With no history of resale or capital growth, investing in new properties might carry more risk.
• Less potential for value-adding: New homes may offer limited opportunities for renovations or improvements, so if you’re interested in DIY projects, a new property may not be ideal.