Buying Overseas Property - New Build vs Existing Property
When buying overseas property, a common question is whether to buy a new build (key-in-hand) property or an existing (resale) property. There are several pros and cons to New Build Property and Existing Property.
New Build Property
Pros
Personalise – A new build property offers the opportunity to choose equipment, materials and finishes to meet your personal needs and tastes. With New development projects with various property styles, you may be able to choose the plot, property design, and location.
Latest Building Standards – New builds are required to meet the latest regulations for safety, energy efficiency and environmental standards, using modern construction techniques and technology.
Modern Design – New build properties in the latest designs will appeal to potentially younger buyers in the resale market
Warranty – Although the duration may vary, developers are required to provide construction guarantees in most countries. The builders will be obliged to fix any faults you discover with the property after you have taken possession.
Capital Appreciation – Depending on when you invest in the project, buyers often get discounts.
Attractive Finance Options – Developers often provide favourable finance options or payment schemes, which you would not get on a resale property. And you pay for the property in staged payments as the property is built.
Lower Taxes – VAT and property transfer taxes can be lower depending on the country.
No Buyer Chain – New-build buyers won’t have their sales fall through to a buyer chain collapsing.
Haggle On Price – Unlike resale properties, new build properties are often open to negotiation, particularly at the start of the development.
Lower Repair & Maintenance Costs – Modern buildings built by reputable builders to a high standard will have lower repair costs. Similarly, maintenance costs are reduced with modern new build properties.
Cons
Longer Process – On average, a new build property can take up to 12 months to complete after receiving building permissions.
Bureaucracy – New builds involve more paperwork to ensure the property complies with the relevant regulations.
Location – New builds are often located further out from the resort centres.
Price – Sometimes, a new build property can be more expensive than existing property, depending on the location and age of the property.
Greater Risk – Compared to buying an existing property, new builds have greater risk in the form of late delivery, incompletion, or defects.
Legal Costs – This can be higher due to the additional complexity and protection required before, during and after the property has been completed.
Nothing To View – You will often have nothing to view with a new build other than mock-ups and architectural designs.
Amenities – Developers can promise amenities to be included in the development, such as sporting facilities, shops and restaurants. Sometimes buyers may find the developer does not complete the promised amenities for the development.
Existing (Resale) Property
Pros
Price – Sometimes, a new build property can be more expensive than existing property, depending on the location and age of the property.
Location – New build properties may not be available in high-demand areas, city centres or historical villages.
Timing – If the property is ready for occupation, you can take possession once the paperwork is completed allowing you to start using the property yourself or rent out the property.
Bureaucracy – Normally, there is less paperwork required for an existing property compared to new build property for both the purchase of the property and when raising finance.
Cons
Guarantees – While you can take measures to protect yourself, existing properties do not come with any warranties.
Repairs & Maintenance – Old resale properties often require higher repair and maintenance.
WYSIWYG – What You See Is What You Get – While the property ticks most boxes on their perfect property checklist, many buyers will need to make changes to the property to bring the property to their needs – meaning additional costs.
Getting Expert Help
Whether it is an existing (resale) property or a new build (key-in-hand) property, there are a lot of potential pitfalls. We can help you get the right support and advice for every stage of the buying process – Contact us.
