On reflection, all that glitters is not gold
Magpie buyers’ are always tempted by the sheen of new-build properties, but in reality such homes often offer a lot less than meets the eye.
First, let’s get the rural myth out of the way: contrary to popular opinion, scientists have shown magpies are not attracted to shiny objects, but more likely suffer from neophobia, the fear of the new. No such fear, however, exists in magpie buyers who, sometimes guided by unscrupulous agents and after having been shown a few shabby fixer-upper resale properties, usually jump when they see the show flat in a new development and can’t stop themselves from signing on the dotted line.
Over the past few months, I’ve been surprised by some show homes myself, albeit not in quite the same way. The size and sensation of space in some modern villas and apartments has been distinctly under, rather than overwhelming, while the asking prices are anything but compact and bijou. Unless you’re careful, it is easy to be blinded by the light reflected in polished surfaces and the gleam of rented furniture, so much so that many fail to notice the 33% reduction in floor space and 33% hike in sale prices.
At the same time, most new developments, precisely because they are new, lack the most basic, underlying value of the best real estate: location. If the nearest shop is a marathon away or you have to get in your car to get to a bar (and then need to think about how to get home again safely once you’re there), how attractive do you imagine that will be to a rental client or future potential purchaser? Sea views are all well and good, but if the sea is so far away you need a telescope to see it, maybe the view isn’t all that stunning?
The reality is that all too many buyers don’t think like sellers, or even tenants. When they fall for something shiny in the moment, they don’t factor in the long-term consequences of paying more for less space in a less-than-ideal location. In fact, the greatest threat to the value of their investment could be the same developer or agent who sells them the place in the first place and who is already planning Phase II just next door.
Naturally, there are exceptions to every rule. Some new developments, because of where they are (think front-line beach, or in quiet streets in town centres) or how well they’re built (to higher eco-friendly quality or with better-than-bog standards), will always offer strong competition to resale properties.
While we all like shiny, new things, there’s real value in older properties that have been worth buying, and reselling, for years. I’d suggest would-be buyers look beyond the glitz and glamour of the new and the view you can see for now and focus on opportunities in established developments. Many clients will still purchase new simply for reasons of convenience. After all, who wants to take on a major project in another country?
However, as most people have worked hard to afford the luxury of a holiday home, it seems daft (at least to me) to not spend a little more time and effort for a potentially better investment. Let’s face it, this is not a new car we are talking about, but often a huge investment. So my advice is, if you’re willing to do some work, you can find it all – location, space, price and even a view – for less and still make it new to you.
By Adam Neale | Property News | August 3rd, 2020