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A Newly Built Home or an Existing House?
By arlene | September 4, 2008
At first it might be a difficult decision to decide whether to buy a new or an existing house. This deals with the pros and cons of both and will hopefully provide the future home owner with information that will make the decision simpler.
Newly built house
If you build a new house, you could choose the design. This way the house should fit all your specific requirements and satisfy all your needs (within the limitations of your budget), while being in the neighbourhood of your choice. By designing the house according to modern trends, the property could also be more appealing to future buyers.
All new homes are covered by a five year structural guarantee (from the date of occupation) by the National Home Builders Registration Council (NHBRC). This guarantee gives the new owners peace of mind regarding the overall structure of the building.
New homes come with new material and equipment such as geysers and stoves. These articles usually carry a one year guarantee from the manufacturers.
Although new buildings are more expensive, there is the benefit of the exemption of transfer duties which are usually built into the “all costs” price tag. Transfer duties are only payable on the price of the stand (ere. This is considerably less than transfer duties on an existing house, of which the price is much higher. When buying a stand from a developer, all transfer costs are normally included in the purchase price.
New units are usually more expensive than existing homes, because the materials used were purchased by the developer at current prices. According to recent figures from Absa, a new house will cost a future home owner about 30% more than an existing house.
Expenses to settle into a new house will also add to the costs. Burglar protection measures are for the new owner’s account. Extra safety doors, alarms, landscaping and other added features will also have to be paid for separately.
These additional expenses should be taken into consideration when you compare a new house to an existing one.
New or existing house?
| Existing house |
Newly built house |
| Less expensive than newly built house. | Will cost more than an existing house (on average 30% more, according to Absa). |
| Rooms will probably be larger than a new house’s. | Building at today’s prices means economic design, often smaller than older homes. |
| Transfer duties are calculated on the full purchase price of the house. | Transfer duties are calculated on the price of the stand only. |
| You cannot change the design of the house; you can only do alterations and additions. | The house will be designed to your requirements and specifications. |
| No structural guarantee exists on an existing home, older than five years | The National Home Builders Registration Council provides a five year structural guarantee on the house. |
| Appliances are not covered by a guarantee from manufacturers. | Appliances are new and are usually covered by manufacturers’ guarantee. |
| The garden and lawn are already established. | You will have to establish your own garden. |
| The security system, fences and other extra features are already in place. | Many extra costs will occur, such as installing an alarm system and putting up a fence. |
| You can move in on specific
Date, which can be soon after purchase. |
You can only move in when the house is completed. |
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