By Philippe Brach, CEO, Multifocus Properties & Finance
It’s a question as old as time itself: do new or established properties make better investments? I’m a big believer that new properties offer a raft of benefits that investors can take advantage of, although there are some things to be aware of.
As a real estate investor of more than 15 years, I’ve bought a number of different property types. Without a doubt, the most successful investments I’ve purchased have one thing in common: they were all brand new.
Investing in new properties is advantageous for a number of reasons, including:
As you can see, there are plenty of benefits to buying new properties to invest in. However, risks do exist. I would caution investors against purchasing off-the-plan apartments in the current market. Although new apartments have similar benefits to those I’ve outlined for houses, they also have their own unique set of drawbacks. Particularly at the moment, buying off-the-plan units can be challenging due to lending restrictions and slow capital growth driven by oversupply. This may change in the next few years, as developers slow down building apartments.
Instead of diving into purchasing off-the-plan apartments, I suggest investors consider new master-planned communities, which have come a long way over the last 20 years. These are very well thought out, with plenty of parks and community features and covenants to ensure that the quality is top notch.
Another option for investors keen to buy new is an ‘infill’ project, which is a single property built on a lot in an established suburb. These types of properties have high appeal to a broad range of tenants and, most importantly, in the medium term they offer strong capital growth prospects.